50% Gross Income TestRealized1031.com2019-09-15 08:00:00
50% Gross Income Test
In order to qualify as a QOZB, an investor must demonstrate that a property or business generates at least 50 percent of its gross income from the active conduct of a trade or business in a QOZ. A trade or business will satisfy the 50% gross income test if it meets any of the following:
Hours Test: at least 50% of hours spent performing services for a QOZB by its employees and independent contractors (and by the employees of independent contractors) are performed within the QOZ, or
Pay Test: at least 50% of pay allocated to employees and independent contractors are in exchange for services performed in the QOZ, or
Qualitative Test: the QOZB’s positioning in a QOZ is critical to the generation of at least 50% of the gross income of the trade or business.
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