Opportunity Zone Investment

The Tax Cuts and Jobs Act of 2017 added Opportunity Zones to the Internal Revenue Code to spur economic development and job growth in distressed communities by attracting private capital investment to those communities. Federal income tax benefits are available to taxpayers  who reinvest their capital gains in a Qualified Opportunity Fund (QOF) – an investment vehicle organized as a corporation or partnership. The potential investor base for this program is extraordinary – it is estimated that as much as $6 trillion of unrealized capital gains may exist in capital assets that are eligible for re-investment in the OZ program. 

More than 8,000 Opportunity Zones throughout the United States (including Puerto Rico) have been designated for investment by the IRS. Opportunity Zones keep their designation for 10 years. After the Opportunity Zone designation expires, however, taxpayers may elect to step-up their basis in an QOF investment that they have held for 10 years. The deadline to make the election extends through 2047. Investors do not need to live, work or conduct business in an Opportunity Zone to take advantage of the tax benefits – they only need to invest in a QOF. The QOF is capitalized with investors’ capital gains realized from other investments, such as proceeds from the sale of a business or stock.  

Robinson+Cole’s lawyers give legal advice regarding development strategies that can help realize the full benefit and unlock the economic potential that Qualified Opportunity Zone investments have to offer.  Drawing upon our related experience in tax credit and community development financing, our Opportunity Zone and Impact Investments Team advises on the following key services. 

  • Analyzing and applying the Internal Revenue Code regulations for eligibility, exemptions and compliance for qualified opportunity zone businesses and qualified opportunity zone business properties, and
  • Establishing and certifying qualified opportunity funds (QOF);
  • Structuring, negotiating and documenting corporate, partnership or limited liability company organizational documents for QOFs; and
  • Structuring, negotiating and documenting acquisitions and developments within QOZs.
    • Experience

      • Closed a $10 million Qualified Opportunity Fund investment representing investor client with capital gain tax liability seeking to take advantage of the tax deferral and reduction benefits of the Opportunity Zone program.

      • Represented equity investor client in tiered investment structure incorporating a Qualified Opportunity Fund purchasing Qualified Opportunity Zone business interests in the form of a real estate partnership acquiring and developing property in a Qualified Opportunity Zone in the New York metro area.

      • Represented client in review and structuring of real estate equity investment in opportunity zone property through a special purpose qualified opportunity fund and set forth tax structuring requirements for qualified opportunity zone business investment vehicle.

      • Counsel to developer team structuring options around sale and development of opportunity zone property.

      • Represented client in sale of property located in opportunity zone with regards to QOZB related party rules and follow on investment options with capital gains.

    • Publications + Presentations
    • "Connecticut: The Land of Opportunity (Zones)," co-presented by Michael J. Kearney Jr. and Michele L. Maresca, at the "From Soil to Solar: Land Law Development Forum" (3/11/2020)
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        • Connecticut: The Land of Opportunity (Zones)

        "Connecticut: The Land of Opportunity (Zones)," co-presented by Michael J. Kearney Jr. and Michele L. Maresca, at the "From Soil to Solar: Land Law Development Forum" (3/11/2020)

        Opportunity Zones and Impact Investments Team lawyers Michael Kearney and Michele Maresca presented the program “Connecticut: The Land of Opportunity (Zones)” at the second 2020 “From Soil to Solar: Land Law Development Forum” at the firm’s Hartford office on March 11, 2020. They addressed the potential federal tax benefits available to Opportunity Zone investors and an overview of Qualified Opportunity Fund investment vehicles, including fund structuring and on-going IRS compliance matters.

        Glendowlyn Thames, Deputy Commissioner, Connecticut Department of Economic and Community Development, discussed the additional benefits offered by state and local  Connecticut government for properties and communities located within Opportunity Zones. She also provided an overview of the state's plan to work with private investors and developers to generate economic growth in those areas. Jonathan Ewert, CEO of CapZone Analytics, examined the potential federal and state tax-incentivized economic returns to Opportunity Zone investors and development and job growth opportunities within these designated areas. View a photo of the speakers on the firm’s LinkedIn page.


      "Opportunity Zone Update - Understand it Benefits and Complexities," as the final From Soil to Solar Land Law Development Forum (11/14/2019)
      • » more info

        • Opportunity Zone Update - Understand it Benefits and Complexities

        "Opportunity Zone Update - Understand it Benefits and Complexities," as the final From Soil to Solar Land Law Development Forum (11/14/2019)

        Brian Flaherty, Jerome Garciano and Michael Kearney, members of Robinson+Cole’s Opportunity Zone and Impact Investment Practice Team, shared their insights on the latest round of proposed IRS regulations and key lessons learned from recent Opportunity Zone investment deals closed by Robinson+Cole in the program “Opportunity Zone Update - Understand its Benefits and Complexities,” the final From Soil to Solar: Land Law Development Forum in a webinar on November 13, followed by an in-person presentation on November 14, 2019. 


        The Tax Cuts and Jobs Act of 2017 created Opportunity Zones to spur economic development and job creation in certain economically distressed communities by offering tax incentives for private capital investment in real estate and businesses located in those communities. Investors and real estate developers looking to take advantage of these valuable tax benefits offered by the Opportunity Zone program need to understand its rules and complexities. 


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