On February 7, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a Notice of Proposed Rulemaking (the “Proposed Rule”) designed to combat and deter money laundering in the U.S. residential real estate sector, which has made it difficult for legitimate buyers to acquire real estate due in part to inflated prices resulting from an increase in buyers and the ability of those additional buyers to make “all cash” offers using ill-gained funds in lieu of financing. The public comment period for the Proposed Rule expires on April 8, 2024.[1]Continue Reading FinCEN Proposes New Rule to Deter Money Laundering in the Residential Real Estate Sector

Whether you are a hotel owner, operator, or developer, or anyone who has an interest in an LLC, corporation, or limited partnership, you should be aware of your new compliance obligations under the Corporate Transparency Act (the “CTA”). To put a finer point on this, the Financial Crimes Enforcement Network (“FinCEN”), the bureau under the Treasury Department tasked with enforcing the CTA, believes that over 32 million businesses, both foreign and domestic, will be required to comply with new reporting requirements or be subject to civil fines or even criminal penalties. Continue Reading Hospitality Alert: Quick Facts on the Corporate Transparency Act

Sinatra may have found success in the city that never sleeps, but a California court has just made it more difficult for any party doing business with a California resident to do the same. At least, when it comes to resolving disputes without a jury in a New York courtroom, or in the courtroom of any other jurisdiction that enforces pre-dispute jury trial waivers. This case will be of major interest to commercial lenders, and other businesses, who prefer to use New York as their jurisdiction of choice for governing law and adjudicating disputes.
Continue Reading Start Spreadin’ the News: California Court Says No to New York, New York; Rejects Forum Selection Clause

Recent developments in the energy sector indicate that blockchain technology is being embraced to address a range of issues including network security and improved integration of renewable generation and demand response resources. This emerging technology continues to have the potential to become a disrupter in the energy industry.
Continue Reading Blockchain Continues to Make Headway in the Energy Industry

Qualified Opportunity Zone Businesses

BACKGROUND

In December 2017, as part of the Tax Cuts and Jobs Act (“TCJA”), Congress established a new tax incentive program to promote investment in certain low-income communities designated by the IRS as qualified opportunity zones. The tax incentives obtained by investing in a qualified opportunity fund (“QOF”) allow taxpayers to (i) defer paying taxes on capital gain from the sale or exchange of appreciated assets; (ii) receive a permanent exclusion from taxation of up to 15 percent of the originally deferred gain; and (iii) for taxpayers that hold their investment in the QOF for at least 10 years, a permanent exclusion from taxation for any appreciation in excess of the deferred gain.

On April 17, the Treasury Department released its second round of guidance on Opportunity Zone investments in the form of proposed regulations (the “New Proposed Regulations”). These newly proposed regulations supplement and in some cases revise the proposed regulations issued in October of 2018 (the “October Proposed Regulations”). [1]

The New Proposed Regulations provide further clarity, but leave many questions unanswered. This is Part II of our series of blog posts on the New Proposed Regulations. This post addresses key issues relating to the requirements for qualified opportunity zone businesses and qualified opportunity zone business property. For Part I of our explanation, which addresses qualified investments in qualified opportunity funds, please click on the link here.
Continue Reading Opportunity Zones Update: NEW PROPOSED TREASURY REGULATIONS (PART II)