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KPMG report: Opportunity zones and REITs

KPMG report: Opportunity zones and REITs

Real estate investment trust (REIT) investments in opportunity zones may yield tax benefits. This article explains how new opportunity zone provisions apply to REITs, taking into consideration proposed regulations.


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In brief, a taxpayer (including a REIT) may: (1) temporarily defer an eligible gain by reinvesting this gain in a qualified opportunity fund (QOF), which includes an entity electing to be taxed as a REIT; (2) have a portion of the reinvested gain permanently excluded from gross income if the investment is held for at least five years; and (3) permanently exclude post-acquisition gain from gross income if the investment is held for at least 10 years. However, notwithstanding these tax benefits, some taxpayers have been hesitant to enter into opportunity zone transactions due to lack of clarity.

Read a June 2019 report [PDF 163 KB] prepared by KPMG LLP: Opportunity Zones and REITs—The Latest Guidance from Treasury and the IRS

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