IRS Requests Comments on Investing in Qualified Opportunity Funds

On May 1, 2019, the Internal Revenue Service (IRS) issued a notice of proposed rulemaking (NPRM) for guidance under section 1400Z-2 of the Internal Revenue Code relating to capital gains that may be deferred as a result of investing in a qualified opportunity fund. The NPRM also updates portions of the previously proposed regulations under section 1400Z-2, including:

  • the definition of “substantially all” transactions that may trigger the inclusion of gains a taxpayer elected to defer under section 1400Z-2,
  • the treatment of leased property used by a qualified opportunity zone business,
  • the use of qualified opportunity zone business property in the qualified opportunity zone, and
  • the “reasonable period” for a qualified opportunity fund to reinvest proceeds from the sale of qualifying assets without paying a penalty.

The comment period closes July 1, 2019. Please note that the public hearing for the NPRM will be held on July 9, 2019, at 10 A.M. at the New Carrollton Federal Building at 5000 Ellin Road in Lanham, Maryland. Outlines of topics to be discussed at the public hearing are also due July 1, 2019.

  • Review the NPRM and submit comments or outlines of topics for the public hearing here.
  • Advocacy contact: Charles Jeane at (202) 205-7168.