Bulletin Board Magazine 2019 Volume 2

Highlights of Opportunity Continued

What is a Qualified Opportunity Zone Business?

formed as either a corporation or partnership. The IRS' proposed regulations allow a fund to "self-certify" that eligibility tests (including a 90 percent asset test) are met. Form 8996 can be submitted to the IRS to certify eligible status as a qualified opportunity zone fund. Failure to meet investment standards will result in penalties. Taxpayers have 180 days from the original sale to "roll over" the eligible original gain into an opportunity zone fund. Taxpayers holding investments for at least 10 years may achieve exclusion of gain in excess of the original deferred gain amount as discussed above. Further, a complex set of rules such as original use, substantial improvements, active business and asset holding requirements are imposed for qualified investments.

The Tax Cuts and Jobs Act eliminated the like kind exchange opportunities for tangible personal property such as art work or machinery and equipment. Under current tax law like kind exchanges are only available for real property. New Jersey State Conformity The New Jersey Division of Taxation recently issued guidance indicating that the State of New Jersey will allow taxpayers to enjoy the benefits of opportunity zone investments. Conclusion/Summary Taxpayers recognizing eligible gains (i.e., capital gains from sale transactions between unrelated parties) may elect to defer the original gain until at least December 31, 2026 by investing the gain amount in a qualified opportunity zone fund. Such funds can be

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A qualified opportunity zone business must meet active trade or business asset tests and certain businesses such as golf clubs, race tracks and liquor stores are not eligible. Further the use of the business property must be substantially used within the zone. The active business test means that at least 50 percent of the gross income of a qualified opportunity zone business is derived from the active conduct of a trade or business in the opportunity zone. Coordination with Other Tax Law Opportunities for Deferral of Gains In general, taxpayers can use other tax strategies for achieving gain deferral such as installment sale rules under Code Sect ion 453, and Section 1031 like kind exchange rules.

Archer & Greiner is nowArcher. But what matters most is what remains the same. Our new name still represents an unwavering commitment to delivering large-firm expertise with small-firm attention—no matter the size of the client. It’s a philosophy that’s helped us grow into one of the largest and most trusted law firms in the Mid-Atlantic region, serving businesses and individuals throughout the region and in a growing number of other states and jurisdictions. With a network of regional offices from Delaware to New York, Archer has more than 175 lawyers practicing in all major legal disciplines

including corporate, labor, commercial litigation, family, real estate and many more. Our firm never forgets that we are a service business: we put our clients first.

We believe our firmdistinguishes itself bymeeting the needs of our clients at every level of legal complexity, while committing our resources to remain on the cutting edge of developing legal issues and technology, and managing our clients’ interests with an ongoing commitment to value. We understand the legal market is highly competitive. That said, our firm has enjoyed steady growth driven primarily by our strong commitment to responsive and cost-effective client service. Our Offices Archer’s principal office is located in Haddonfield, New Jersey, an historic and dynamic community, less than 10 miles from Center City Philadelphia. Our Haddonfield office is within walking distance of southern New Jersey’s major commuter rail line, making for easy connections not only locally, but also to our clients traveling from locations throughout the northeast corridor. The firm also maintains offices in Hackensack, Princeton, Flemington and Red Bank, New Jersey; Philadelphia, Pennsylvania; New York, New York; and Wilmington, Delaware. The offices in these locations conveniently serve our clients’ needs throughout our growing, regional service base. Our Attorneys Our attorneys have impressive academic credentials, representing some of the very best law schools and undergraduate institutions in the country. We encourage and expect our attorneys to continue their legal training throughout their career to keep current with new developments. Our lawyers have distinguished themselves in speaking and writing engagements for countless trade, business and educational institutions. Archer attorneys serve in leadership positions in local, state and national bar organizations and are active on the boards of many prominent nonprofit and for-profit companies and organizations. The attorneys of Archer practice nearly every type of law:

Banking

Governmental Regulations

Personal Injury Product Liability

Bankruptcy/Creditor’s Rights

Health Care

Computer and High Technology Intellectual Property

Real Estate Tax Appeals Real Estate, Land Use

Construction (public/private) Corporate and Securities

International Law

Labor and Employment

School Law

Environmental

Litigation

Tax

Estates and Trusts

Matrimonial

White Collar Criminal

For more information, please contact us at 732-268-8000 or visit www.archerlaw.com.

www.archerlaw.com

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