Second Set of Opportunity Zone Treasury Regulations Summary
Foxdale Management LLC
This posting is intended to provide a summary of some of the relevant regulations issued by the Treasury related to Opportunity Zones on April 17, 2019. Nothing contained in is this posting should be considered legal or tax advice and investors should consult their legal and tax advisors before making any decision to defer capital gains or make an investment in Qualified Opportunity Zone Property or a Qualified Opportunity Zone Business.
The Treasury issued the much anticipated second set of regulations related to investments made in Opportunity Zones under the Tax Cut and Jobs Act of 2017 (the “Act”). The regulations focused on clarifying many terms and provisions of the Act to foster greater certainty among investors looking to pursue investments in Qualified Opportunity Zones (“QOZ”). The regulations update aspects of the previously proposed regulations and to provide clarity on issues such as the requirements for “substantially all” where it is used, transactions triggering in...more
Internal Revenue Service (IRS), Treasury. 26 CFR Part I [REG-120186-18] RIN 1545-BP04
Pre-release of DEPARTMENT OF TREASURY
Internal Revenue Service
26 CFR Part I
[REG-120186-18]
RIN 1545-BP04
Investing in Qualified Opportunity Funds
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking; partial withdrawal of a notice of proposed rulemaking.
SUMMARY: This document contains proposed regulations that provide guidance under new section 1400Z-2 of the Internal Revenue Code (Code) relating to gains that may be deferred as a result of a taxpayer’s investment in a qualified opportunity fund (QOF), as well as special rules for an investment in a QOF held by a taxpayer for at least 10 years. This document also contains proposed regulations that update portions of previously proposed regulations under section 1400Z-2 to address various issues, including: the definition of “substantially all” in each of the various places it appears in section 1400Z- 2; the transactions that may trigger the inclusion of gain that a taxpayer has elected t...more
Leveraging Opportunity Zones to Offset Increased 2018 Tax Liabilities
As tax payment time approaches and individuals are adjusting to the reality that tax liabilities are higher as a result of the Tax Cuts and Jobs Act of 2017 (the “Act”), one area of relief lies in Opportunity Zones where individuals can defer tax on capital gains until 2026 provided the capital gains are invested in Qualified Opportunity Zone Property (“QOZP”) or in a Qualified Opportunity Zone Business (“QOZB”). For investors who elect to defer capital gains to reduce their 2018 tax liability, there are numerous requirements to maintain the deferral.
First, a taxpayer has 180 days from the date the capital gain was realized to make the deferral election. For taxpayers looking to defer gains reported on a K-1, the investor has 180 days from the end of the year to make the deferral election. Once the deferral is made, the taxpayer has 180 days or less, depending on the date of deferral, to have 90% of their deferred assets invested in a QOZB or QOZP.
When a taxpayer defers a gain, t...more
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