During our Q3 and Q4 Opportunity Zones webinars last year, we received many great questions covering a wide range of important topics. To help further your understanding of this exciting new program, our General Counsel, Kelly Alton, a nationally recognized tax attorney who previously worked at the Office of Chief Counsel of the Internal Revenue Service National Office in Washington, DC, has partnered with our co-presenter, Novogradac & Company, to provide responses.
This is the third installment of our Opportunity Zones Q&A blog series. You may read the previous questions and answers here:
Q: Is there a maximum ownership percentage (e.g., 10% or 20%) which a single investor can have in an QOZ Fund?
A: There are no limitations on the percentage of ownership that an investor can own in a Qualified Opportunity Fund, with perhaps one exception.
There is a requirement that Qualified Opportunity Zone Business Property must be acquired by the Qualified Opportunity Fund from an unrelated party, which status is determined by using a 20% common ownership test for relatedness. To the extent that the seller of an asset to a Qualified Opportunity Fund also wants to own an interest in the Qualified Opportunity Fund, their ownership in the Qualified Opportunity Fund would be limited to 20% or less.
However, for investors that have no relationship to the sellers of the property, there is no limitation on the percentage of their ownership in the Qualified Opportunity Fund.
If you’d like more information on Opportunity Zones, please take a look through our web-based OZ resource center — or feel free to contact us at 1-800-339-1031.