| The "50-percent of gross income test" is actually that you have to meet 1 of 3 standards[1]: Qualified Opportunity Zone Business
QOF 50-percent of gross income test
Q56. What is the 50-percent-of-gross-income test? A56. Each taxable year, a QOZ business must earn at least 50 percent of its gross income from business activities within a QOZ. The regulations provide three safe harbors that a business may use to meet this test. These safe harbors take into account any of the following— - Whether at least half of the aggregate hours of services received by the business were performed in a QOZ; - Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or - Whether necessary tangible property and necessary business functions were located in a QOZ. Q57. Must a QOZ business meet all three safe harbors to satisfy the 50-percent-of-gross income test? A57. No. A QOZ business satisfies the 50-percent-of-gross income test if it satisfies any one of these safe harbors. For example, if 50 percent or more of all the hours of services that a business receives and uses were performed in one or more QOZs, then the business satisfies the hours of services received test and, therefore, satisfies the 50-percent-of-gross-income test. [1] https://www.irs.gov/credits-deductions/opportunity-zones-fre... |