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How Construction Businesses Can Benefit From Qualified Opportunity Zones

By JOHN BLAKE, CPA

April 24, 2020

When Congress passed the Tax Cuts and Jobs Act (TCJA) at the end of 2017, they introduced a new tax incentive for capital investors. The Qualified Opportunity Zone (QOZ) program defers (and potentially eliminates) individuals’ capital gains taxes when they finance capital improvements in pre-approved, economically depressed land tracts called opportunity zones. The QOZ program has been operational for more than two years now, but many taxpayers are just now dipping their toes into the process.

In December, the IRS and the Treasury Department released final regulations for the program (TD 9889) that clear up some ambiguities in the law that became apparent once the program was put into practice. With help from these regulations, investors now have a clear path forward.

What wasn’t in the law or described in the regulations was how beneficial the program could be for construction businesses. Contractors, builders, engineering firms, developers and other construction businesses can benefit from the program as well.

 

About the Author

John focuses on helping with the tax needs of real estate, technology and manufacturing, distribution, and wholesale companies. He works with management and business owners to review their business plan, tax planning process, identify additional saving opportunities, and ensure compliance and reporting deadlines are met. Also, John helps educate clients about the new opportunities available...

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