Last Updated May 14, 2019

Law and Practice

Contributed By McGuireWoods LLP

Authors



McGuireWoods LLP has a diverse real estate practice of more than 80 lawyers and land use planners in its offices in Tysons, Charlottesville, Richmond and Norfolk, with skills in a wide range of traditional and non-traditional real estate transactions. The firm’s transactional representation spans all aspects of real estate acquisition, development, financing and disposition, including acquisition, sale, leasing and financing transactions, as well as project finance, construction, public-private partnerships, negotiation of local and state incentives and privatization transactions. The team respresents clients around the world on various sides of such transactions, including Fortune 500 companies. The transactional practice is complemented by the firm’s land use expertise, as it frequently handles zoning and land use matters for development projects.

Congress enacted the Tax Cuts and Jobs Act (TCJA) with the intent of spurring economic growth and development. To this effect, TCJA introduced reduced corporate and individual tax rates, the immediate write-off of business capital expenditures, and new tax incentives under the Opportunity Zone program. The real estate investment landscape is impacted, directly and indirectly, by the overhaul of the tax code, as it presents many new opportunities and pitfalls.

One of the key enactments of TCJA was the Opportunity Zone program, whose objective is to bring new business capital to low-income and distressed communities. Fundamental to the program is the situs of where the businesses are to be located. Accordingly, real estate investors are determining how best they can participate in the program to achieve their tax objectives.

As of the first quarter of 2019, there has been limited regulatory guidance on Opportunity Zones providing precise certainty to taxpayers. While some questions remain open or unclear, there has been significant traction in the Opportunity Zone community, and funds have been forming to take advantage of the capital gains tax deferral and reduction available under the program. Given that the first set of regulatory guidance was taxpayer-friendly, additional guidance of a similar temperature is expected shortly to help fill in the gaps. Guidance is highly anticipated, due to take advantage of the 15% reduction on capital gains tax expiring at the end of 2019.

McGuireWoods LLP

1750 Tysons Boulevard
Suite 1800
Tysons, VA 22102-4215

+1 703 712 5000

+1 703 712 5050

info@mcguirewoods.com www.mcguirewoods.com
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Authors



McGuireWoods LLP has a diverse real estate practice of more than 80 lawyers and land use planners in its offices in Tysons, Charlottesville, Richmond and Norfolk, with skills in a wide range of traditional and non-traditional real estate transactions. The firm’s transactional representation spans all aspects of real estate acquisition, development, financing and disposition, including acquisition, sale, leasing and financing transactions, as well as project finance, construction, public-private partnerships, negotiation of local and state incentives and privatization transactions. The team respresents clients around the world on various sides of such transactions, including Fortune 500 companies. The transactional practice is complemented by the firm’s land use expertise, as it frequently handles zoning and land use matters for development projects.

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