McDermott, Will & Emery: The 90 Percent Test (October 28, 2021)

Steven Hadjilogiou and Keith Hagan, of McDermott, Will & Emery, have made available for download their article “The 90 Percent Test”. The abstract is as follows:

Since coming into effect in January 2018, Subchapter Z of the US Tax Code—also known as the opportunity zone provisions—has enabled investors to pour billions of dollars into a broad array of businesses, from real estate development companies to tech startups. Investments in qualified opportunity funds (QOFs) offer a number of distinct tax benefits, not the least of which is reduced capital gains tax liability. But the rules governing these investments are quirky, perplexing and—in some cases—severely restrictive.

For an entity to be recognized as a qualified opportunity fund (QOF) it must self-certify as such and subject itself to the requirements of the “90% test.” Failure to do so or to satisfy the 90% test can lead to significant penalties. In this fifth of our series of articles on QOFs, we discuss in more depth the 90% test.

To see the full article, click: “The 90 Percent Test”

Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.

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