Jeffrey Kolodny Featured in Law360 Article
Firm News | October 29, 2018
In Law360’s article “5 Unanswered Questions In IRS’ Opportunity Zone Guidance”, Kleinberg Kaplan’s Jeffrey Kolodny provides his insight on the tax incentives in “opportunity zones”. The article describes “opportunity zones” as economically distressed areas. In order to improve these zones, the Internal Revenue Services proposed business-friendly regulations to encourage “qualified” businesses and investors to focus on the area. These regulations include discounting taxes by 10 – 15 percent and, in some situations, exemption from taxation completely.
However, while these proposals are set in place, there is confusion regarding applying these rules and how key terms are defined. Kolodny suggests the definition in the statute is vague, which could make investors hesitant for what’s to come. “The concern is that somebody might invest in a fund thinking that it’s going to qualify for this tax deferral. But for one reason or another, the fund doesn’t qualify and they defer their tax. Are they going to be penalized for that?” Kolodny asks.
While the proposal supports economic growth and development within “opportunity zones”, the ambiguity of the whole ordeal will likely impede its progress.
To find out more on what this proposal entails, please contact Jeffrey Kolodny.