We have published our whitepaper: Gain Deferral Using Qualified Opportunity Zone Investment Strategies Legal Update.  "Qualified Opportunity Zones" are not specific to renewable energy and do not involve tax credits but provide a powerful new tax benefits as a result of their enactment last year as part of the "Tax Cuts and Jobs Act."

The whitepaper discusses Qualified Opportunity Zones generally.  Two aspects of them are of note to the renewable energy industry.  First, the statutory language appears to apply to ordinary and capital gains (the IRS may take a different view in its guidance).  The applicability to ordinary gains means that the Qualified Opportunity Zone rules could be used by developers to defer the tax gain they recognized on sales of projects to tax equity partnerships or lessors.

Second, the intersection of the Qualified Opportunity Zone rules and the partnership capital account rules requires clarification that we expect the IRS to provide in its guidance.  So the purchase by partnerships of solar projects in Qualified Opportunity Zones is a strategy that requires further guidance before the tax results can be certain.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2018. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.