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How does leased property used by a QOZB get treated?


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  • Michael Sanders
    June 11, 2019

    Complex new rules on leased property. Need FMV lease. Rules are quite liberal.

  • Brett Siglin
    June 11, 2019

    Leased tangible property can qualify as QOZ business property. Real estate projects on leased land in QOZs is eligible. Leased equipment could also qualify as QOZ business property. There is no original use requirement or substantial improvement requirement imposed on leased tangible property due to the nature of the property. Property may be leased from a lessor that is a related party if certain requirements are met for this to be a valid option under the QOF rules.

  • Peter McNeil
    June 07, 2019

    Leased property is treated as a qualified asset in a Qualified Opportunity Fund. No improvements are required. It is also a good tool for avoiding the related party rules on sale of asset to a fund when carrying a 20% interest or higher.

  • Shawn Neidorf
    June 06, 2019

    This is addressed in detail in the second tranche of guidance. We covered it last month in a webinar here at the Arizona Commerce Authority. To view it, visit www.azcommerce.com.

  • Maria De Los Angeles Rivera
    June 05, 2019

    A QOZB can use leased as tangible property for the 70% test. The second set of regulations provide the rules to determine original use and how to value leases for the 70% test.

  • Debbie Klis
    June 06, 2019

    The Treasury has released special rules for leased property. First, to qualify as QOZ business property (QOZBP), leased tangible property must be acquired under a lease entered into after Dec. 31, 2017, and substantially all of the use of the leased tangible property must be in a Qualified Opportunity Zone (QOZ) during