Doug Jones, Partner in the Corporate & Tax Practice Group, was published in the October 11, 2019 Law360 TaxAuthority newswire. In his article, “How the Opportunity Zone Rules Can Work for Entrepreneurs,” Doug illustrates how many entrepreneurs are missing the potentially significant tax benefits of opportunity zones and highlights that the best time to take advantage of those benefits are when a new venture is launched.
Doug explains that early on, it was primarily real estate developers who were interested in opportunity zones. “Immediately after the law was passed — and before [U.S. Department of] Treasury released clarifying guidance — it was not clear how, if at all, the program would apply to entrepreneurs and their start-up and operating business.”
But in the most recent guidance from the U.S. Department of the Treasury, it’s clear that the opportunity zone program can, and does, apply to operating businesses. The recent guidance clarifies that a business will be considered in an opportunity zone if any of the following three safe harbors are satisfied: (1) half of the money a business spends on employee services relates to services performed in a zone, (2) half of the employee services a business consumes, measured by the hour, are performed in an opportunity zone or (3) half of a business’ assets and half of a business’ management functions are located in an opportunity zone.
Doug encourages entrepreneurs to take advantage of the opportunity zone program as a tax-planning tool that will allow them to retain more of the value of their success while simultaneously having an overall positive impact on the communities in which their businesses are located.
To read the article, click here. (Subscription required)