Washington, D.C. - Global law firm K&L Gates LLP has launched a cross-disciplinary Opportunity Zones (OZ) offering to assist clients with the logistical, legal, and regulatory hurdles stemming from the new Opportunity Zones program created by the Tax Cuts and Jobs Act of 2017. The firm’s initiative, which includes lawyers from the tax, policy, investment management, private equity, real estate, renewable energy, and tax-exempt organizations/nonprofit institutions practices, will help clients to manage and navigate the full range of OZ-related issues.
Under the OZ program, individuals and other entities can delay paying federal income tax and receive an increase in basis on capital gains if those gains are invested in Opportunity Funds that hold at least 90 percent of assets in businesses or tangible property located in low-income areas designated as OZs. Gains on Opportunity Fund investments held for at least 10 years can be tax free. These potential tax benefits could reduce the cost of capital for such projects, making them more viable, especially when paired with other development incentives like the New Markets Tax Credit.
The firm’s OZ team works with clients by vetting ideas and determining and meeting the eligibility requirements for qualified OZ properties or businesses; facilitating connections between investors and developers; creating fund products to meet client needs and objectives; providing regulatory advice related to organizing and operating Opportunity Funds; ensuring securities law compliance, including registering the fund sponsor as an investment adviser or qualifying for an exemption; identifying ways to pair OZ tax benefits with other tax and economic incentive programs; complying with tax obligations for investments in Opportunity Funds; and working with Treasury and the IRS to resolve questions about the program.
“This is a terrific opportunity for many of our clients to invest in or develop real estate projects and traditional and innovative businesses in low-income areas around the United States,” said Washington, D.C., government affairs counselor Mary Burke Baker, one of six lawyers/advisors spearheading the OZ group, along with New York partners Adam Tejeda and Ed Dartley; Washington, D.C., partners Cary Meer and Olivia Byrne; and Fort Worth partner Scott Bernhart. “Few law firms, particularly any with large global platforms, have practices focused on this. K&L Gates is uniquely qualified to help clients unlock the full investment potential from OZs with cross-practice capabilities and experience.”
Leaders of the new OZ group will be discussing this dynamic program during upcoming events held in K&L Gates’ New York, Pittsburgh, and Washington, D.C., offices, among others. To learn more about the firm’s OZ services, click here.