San Diego San Diego

The new and final round of guidance on opportunity zones was released in December, and many opportunity zone investors are still understanding the impact. While the 500-page document highlighted many aspects of the rules and regulations regarding opportunity zones, guidance related to the substantial improvement rule was one of the most significant changes.

“The proposed regulations had an asset by asset test as to the substantial improvement rule,” Phil Jelsma, a partner and chair of the tax practice team at Crosbie Gliner Schiffman Southard & Swanson, tells GlobeSt.com. “Generally, with respect to property that has previously been depreciated, the taxpayer must double its tax basis or costs during the first 30 months of ownership to satisfy a ‘substantial improvement’ test.  Raw land or ground up’ development does not need to meet this rule but generally any property with existing structures that have been depreciated would be subject to the substantial improvement test.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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