7825 / Do the opportunity zone rules provide any relief for start-up business ventures?

Yes. The proposed regulations recognize that start-up businesses may have a difficult time making use of the initial working capital that they receive while still qualifying for deferral under the opportunity zone rules. As such, a qualified opportunity fund can satisfy the 90 percent asset test without taking investments received in the prior six-month period into account.

This relief applies only if the assets are held as cash, cash equivalents or debt instruments that have a term of eighteen months or less. The funds must have been received either as a contribution to a partnership or as a contribution to a corporation solely in exchange for stock in the corporation.¹