One of the most important criteria for a QOF is for it to “substantially improve” the property by investing an amount equal to at least 100% of the cost basis (i.e., purchase price) of the property over a 30-month period. Consequently, EPA has asked the IRS:
As a brownfield investor, I’m proceeding with the assumption that these issues will get resolved to my benefit. I am optimistic that regulators will wholeheartedly agree to the enormous synergistic potential between opportunity zones and brownfields. The consensus among those in-the-know seems to be: “Why wouldn’t cleanup costs be covered en route to an immediate vertical development?!”
Of course, this topic is extremely complicated, and I’d be remiss without the disclaimer that all investors should consult with their local legal and tax professionals. And before you call these professionals, here are some recent articles about the opportunity zone and brownfield overlap:
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