Opportunity Zone Property - a simple way?

Client is planning on purchasing a piece of land and constructing a commercial building to rent out in a recently designated opportunity zone. The purchase and construction will be done with a SMLLC and involves no debt. He intends to hold the property long term as a rental.

I'm reading (1400Z-2) where qualified opportunity funds that hold qualifying property in opportunity zones for at least 10 years will receive a step up in basis on the property to FMV at the time of sale. A qualified opportunity fund is defined as "any investment vehicle which is organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property (other than another qualified opportunity fund) that holds at least 90 percent of its assets in qualified opportunity zone property, determined by the average of the percentage of..." It appears there will be an annual certification process for funds and penalties that apply if less than 90% of the assets are held in opportunity zone property.

Will it be possible for the client to take advantage of the opportunity zone basis step up (after holding for 10 years) without going through all the formalities and costs of creating a qualified opportunity fund? He could form a partnership with his wife but prefers to keep things simple.

Pretty sure he has to invest through a qualified opportunity fund in order to get the basis step-up.
https://www.irs.gov/newsroom/opportunit ... -questions

I was also researching this, but to my understanding any deferred amount must be included the earlier of investment being sold of 12/31/2026. My understanding is that unless you investing in an opportunity zone prior to the new code, you aren't eligible to take advantage of the permanent exclusion.

I.R.C. § 1400Z-2(c)
Special Rule For Investments Held For At Least 10 Years — In the case of any investment held by the taxpayer for at least 10 years and with respect to which the taxpayer makes an election under this clause, the basis of such property shall be equal to the fair market value of such investment on the date that the investment is sold or exchanged

Pretty sure he has to invest through a qualified opportunity fund in order to get the basis step-up.

Creating an opportunity fund seems relatively easy and a way for us accountants to add value and billable hours. Setup a corporation or partnership, file the IRS form (which to my knowledge hasn't been released yet) with tax return. If he wants to keep it simple, seems partnership may be the way to go. How much simpler can it get?

My understanding is that unless you investing in an opportunity zone prior to the new code, you aren't eligible to take advantage of the permanent exclusion.

This was taken from Grant Thornton in explaining this new code: "The year of inclusion for this deferred gain is the taxable year that includes the earlier of: (i) the date when the investment is sold or exchanged; or (ii) Dec. 31, 2026.11"

To me this means the ten years begins when you sell it/invest in fund, not on 12/31/26. So the last day people have to invest in these funds is 12/31/26 and then the ten years will be up 12/31/37.

This article explains practically everything:

https://www.forbes.com/sites/anthonynit ... 470df0d623