In order to encourage investment in distressed communities, Congress included in the Tax Cuts and Jobs Act (TCJA) significant tax benefits for investments in so-called Qualified Opportunity Zones (QOZs). The new law allows eligible taxpayers to defer taxation of gain that is reinvested in a QOZ.
With millions of dollars at stake, an overextended real estate developer has a lot to lose if lack of funds causes a project to collapse. To attract investment capital, some developers have been known to resort to financial statement fraud.
Opportunity Zone Proposed Regulations Issued by IRS: Tax Incentives Intended to Spur Investment in Distressed Areas
The Tax Cuts and Jobs Act (TCJA) includes a provision that Secretary of the Treasury Steven Mnuchin said should lead to $100 billion in capital investments in distressed areas — Opportunity Zones (Internal Revenue Code Section 1400Z).
Businesses that acquire, construct or substantially improve a building — or did so in previous years — should consider a cost segregation study. It may allow you to accelerate depreciation deductions, thus reducing taxes and boosting cash flow.