Build Opportunity with Ice Miller's Opportunity Zone Team

Created by the Tax Cuts and Jobs Act of 2017 to spur private investment in small businesses and in commercial and housing projects in low-income areas, the Opportunity Zone Initiative drives private investment to urban and rural low-income communities. Click one of the below icons to learn more.

Investors

Those willing to invest capital gains in areas designated as "Qualified Opportunity Zones" are potentially eligible for preferential tax treatment. Under the current law, this tax benefit has lapsed for investing in an Qualified Opportunity Fund going forward. However, taxpayers who held their investments in a Fund at least five years prior to December 31, 2026, will have their basis increased by 10 percent of the original gain invested in the Fund. For investments held for at least seven years, the taxpayer’s basis is increased by an additional five percent of the original gain. As suggested above, to take advantage of this specific benefit, the investment had to be made by December 31, 2021. Additionally, if investors hold their investment in the Qualified Opportunity Fund for at least 10 years, any capital gain realized when disposing their interest in the Fund likely can be excluded from the investors’ taxable income.

Investors

Funds

Qualified Opportunity Funds are self-designated funds designed to invest in Qualified Opportunity Zones. Importantly, the Fund must invest at least 90% of its assets in property that qualifies as Opportunity Zone Property and/or in a company that qualifies as an Opportunity Zone Business. A Fund must ensure that it satisfies the 90% threshold by the "testing date," which is generally both midway and at the end of the Fund’s taxable year.

Developers

The Opportunity Zone legislation is well-suited for real estate projects. For example, a developer could invest its own capital gains into a Qualified Opportunity Fund and utilize such funds to develop one of its projects within an Opportunity Zone. Alternatively, the developer could raise capital for a project by soliciting from Qualified Opportunity Funds set up by third parties. Developers utilizing Opportunity Zone funding must be cognizant of the numerous deadlines and requirements that are affiliated with Opportunity Zone Projects, including that property utilized in a project must generally be acquired after December 31, 2017 and furthermore the project often needs to be completed within 31 months from receiving funding from a Qualified Opportunity Zone Fund.

Tune In to Our Opportunity Zone Podcast Series

Episode 1: Lessons Learned in Structuring and Executing Opportunity Zone Transactions

Jay Augustyn and special guest Steve Glickman, founder and CEO or Develop LLC, evaluate early returns on the Opportunity Zone Initiative, discuss the importance of data reporting and make predictions on what the program will look like in the near future. Listen Here.

Episode 2: Opportunity Zone Basics: An Overview

Matt Ehinger and Josh Schlake discuss opportunity zone basics and delve deeper into what Opportunity Zones are, how to invest in them and three major benefits investors can reap. Matt and Josh also discuss requirements for opportunity zone funds, the businesses in which they can invest and the timeline for making qualified investments. Listen Here.

Episode 3: Current Regulatory Framework for OZ Investment

Jay Augustyn and Matt Ehinger answer some of the most frequently-asked questions from clients. They explain the difference between passive and active investments and discuss how to make an exit from a single-asset fund compared to a multi-asset fund. Listen Here.

Episode 4: Fund Formation, Capital Raising and Documentation

Matt Ehinger and Tim Capen discuss federal and state security compliance, single purpose vs. multi-asset funds and how Qualified Opportunity Zone Funds differ from traditional funds. What should one consider before creating a Qualified Opportunity Zone Fund? Listen Here.

Episode 5: A Fund Manager’s Perspective to Opportunity Zone Ownership Structures and Investment

Matt Ehinger speaks with special guest Elliot Newman, managing director of Capital Gains Opportunity Fund. Elliot offers an overview of the different types of Opportunity Zone funds as well as a fund manager’s perspective on dealing with developers and attracting investors. Listen Here.

Episode 6: Bridging the Gap Between Public and Private Sector

Stephanie Copeland, CEO of the Governance Project and managing partner of Four Points Funding, joins Jay Augustyn, Ice Miller partner, to discuss how the Opportunity Zone Initiative is revolutionizing the relationship between the public and private sector. Listen Here.

Episode 7: Understanding IRS Guidance for Opportunity Zones

Matt Ehinger, Ice Miller partner, and special guest Chad Halstead, a partner at Katz, Sapper & Miller, discuss existing guidance from the IRS regarding Opportunity Zones and explore some unanswered questions and traps for the unwary with respect to Opportunity Zone investments and projects. Listen Here.

Additional podcast episodes will be released on the first Tuesday of each month. Interested in hearing each new episode before it's posted to the website? Sign up below to receive an alert when new episodes are available.

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For even more information, check out these upcoming speaking engagements and additional resources:

Additional Resources

Opportunity Zones: More Than Traditional Real Estate Development, August 8, 2019
Matt Ehinger Appeared on Inside Indiana Business: "On Economic Development: Qualified Opportunity Zones", July 15, 2019
For Opportunity Zones, When are 180 Days Up?, May 15, 2019
New OZ Regulations Clarify Key Issues for Fund Operations and Investments, April 23, 2019
New OZ Regulations Clarify “Original Use” Test for OZ Real Estate Investments, April 22, 2019
New OZ Regulations Clarify 50% Gross Income Test for OZ Businesses, April 18, 2019
Indianapolis Ripe for Opportunity Zone Investment, March 19, 2019
Seizing the Opportunity: The Vision and Forecast for Opportunity Zones - Part 1, March 13, 2019
For more from this event, see Part 2, Part 3, Part 4 and Part 5

Meet Our Team

Ice Miller's Opportunity Zone Team is comprised of tax, real estate, private equity/fund formation, private wealth and municipal finance professionals, each committed to providing his or her expertise to advance our clients' interests.