Are there any pitfalls regarding “change of use”?
The term "change of use" appeared in a handful of commentaries from the OZ community. In fact, there is only the term "original use" and the tax code requirement that if the original use of property in the Opportunity Zone does not commence with the QOF or the QOZB (whichever is applicable), then the property must be substantially improved.
The acquisition property can not be original use. A new property never used would be OK. An existing property would need to have improvements of tangible property excluding contiguous land of $1 more than original cost to change use.
Doesn’t matter as long as you repack with quailed use within a reasonable time.
According to Section 1400Z-2, tangible property that ceases to be a Qualified Opportunity Zone Business Property shall continue to be treated as one for the lesser of: five years after the date on which such tangible property ceases to be so qualified; or the date on which such tangible property is no longer held by the Qualified Opportunity Zone Business.
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