2B — May 24 - June 13, 2019 — Owners, Developers & Managers — M id A tlantic
Real Estate Journal
www.marej.com
TOTAL CLEANING ASSOCIATES LTD.
O wners , D evelopers & M anagers By Jeremias Ramos, CPA, Withum Top 5 takeaways: 2 nd round of QOZ Proposed Regulations T he Internal Revenue Service recently issued more proposed regula-
Final Cleaning
Janitorial Services
Owners, Developers &Managers Taxpayers who defer a capi- tal gain by reinvesting in a continued on page 16B lating an investor’s basis in a QOF. Specifically, real estate investors were afraid of debt financed distributions being classified as an inclusion event, which would prematurely trig- ger a taxable gain.
section, however, is the per- manent exclusion of the post- acquisition gain from the sale of the interest in the QOF if it is held for more than 10 years. Although the first round of regulations was comprehensive in its explanation on the tax incentives, it left many unan- swered questions for real estate investors, specifically: • Will debt financed distri- butions trigger an inclusion of capital gains? • Can a QOF buy, sell and ex- change QOZ property without impacting an investor’s 10-year holding period? • How will the sale of prop- erty within a QOZ be treated within the 10-year holding period and after the 10-year holding period? • Can land qualify as QOZ property? • Do abandoned buildings or unfinished development projects count as original-use property and therefore not need to be substantially improved? The IRS Will Allow Taxpayers to Count Debt Basis to Avoid Taxable Debt
tions (REG- 1 2 0 1 8 6 - 18) on Sec. 1 4 0 0 Z - 2 , which outline the new tax incentives for investing in economically d i s t r e s s e d communities.
Floor Care
Window Cleaning
Servicing the Janitorial Industry Since 1994 Contact Us Today for a Quote 973-562-0177 or Email: totalcleaning@optonline.net www.totalcleaningltd.com
Jeremias Ramos
For a quick overview, the tax incentives within Sec. 1400Z-2 allow taxpayers to defer a re- alized capital gain for as long as seven years if they subse- quently invest the capital gain into a Qualified Opportunity Fund (QOF) within 180 days. If the taxpayers hold that qualified interest in said fund for five years, they will be al- lowed to take a 10% discount off of the original capital gain. If the taxpayers hold the quali- fied interest for an additional two years, they will be given an additional 5% discount on their original capital gain. Fast for- ward to December 31, 2026 and the taxpayers will only have to pay tax on 85% of their original capital gain that was realized seven years earlier. The holy grail of this code
a section of the MARE Journal Phone: 781-740-2900 Fax: 781-740-2929 www.marej.com
NYCDCA# 2011389 •NJDCA# 13VH06573600 NYCHA Approved Vendor
24 HOUR SERVICE
800.877.7475 • Design • Installation
• Compaction • Shredders • Chutes & Chute Doors • Balers • Recycling Sorters • Chute Cleaning & Repair • Preventative Maintenance • Wastetec-ANSI • UL Listed • Welding Service
S ection P ublisher Steve Kelley skelley@marejournal.com
Financed Distributions One of the biggest hesita- tions for investors was the unanswered question regarding the treatment of debt in calcu- Water/Wastewater Treatment Plant Construction, Maintenance and Services S ection E ditor Karen Vachon editor@0marejournal.com
• Cylinder Repair / Replacement • 2016 NJMFG of the Year Finalist • 2017 NJ Registry of Sustainable Companies • 2017 NYC Gotham Green Award – Green Initiative www.PCS-Green.com TOTAL SUPPORT AFTER A PROPERTY LOSS Mid Atlantic Real Estate Journal 4x4.25 h_Layout 1 1/17/19 7:43 PM Page 1
M. MILLER & SON LICENSED PUBLIC INSURANCE ADJUSTERS SINCE 1960
DESCCO is an experienced WWTP General Contractor specializing in plants just like yours. We have programs for Facility Management, Service, Maintenance, and Construction Upgrades.
n 24/7 Emergency Services n Policy Analysis n Property Damage Assessment n Full Claim Preparation
n Negotiate Loss and Values n Negotiate Maximum Settlement n Facilitate Prompt Reimbursement n Third-generation, Family-owned
FIRE | SMOKE | WATER | WINDSTORM | COLLAPSE | BUSINESS INTERRUPTION MULTI-FAMILY, COMMERCIAL, HOSPITALITY, INDUSTRIAL, AND RESIDENTIAL PROPERTIES
NEW JERSEY | NEW YORK | PUERTO RICO 1211 Liberty Avenue, Hillside, NJ 07205 Toll Free: 877MMiller (877-664-5537) www.mmillerson.com
Food Processing ◦ Pre-Treatment Facilities Pharmaceutical ◦ Recycling ◦ Beverage Municipal Waste & Water ◦ Manufacturing Agriculture ◦ Many More!
MARKETS SERVED
For more information contact us: 610-944-0404 ~ www.desccowater.com
Made with FlippingBook - professional solution for displaying marketing and sales documents online