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Opportunity Zones Q&A: How Much of an OZ Fund Can One Investor Own?

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:

  1. Previously Held Property
  2. Can an LLC Qualify as an Opportunity Fund?

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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.

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