The IRS today updated a list of “frequently asked questions” (FAQs) concerning opportunity zone rules under the new tax law (Pub. L. No. 115-97, enacted December 22, 2017).
The list of opportunity zones FAQs on the IRS website indicates the FAQs were updated on June 7, 2018, to include the following new FAQs:
Q. I sold some stock on December 15, 2017, and, during the required 180-day period, I invested the amount of the gain in a Qualified Opportunity Fund. Can I elect to defer tax on that gain?
A. Yes, as long as it was invested in the 180-day period, under § 1400Z-2(a)(1) of the Internal Revenue Code, you may elect to defer the tax on that gain. A deferral election may be made on your 2017 Federal Income Tax return. Information about the sale of your stock is required to be included in that return using IRS Form 8949. Precise instructions on how to use that form to elect deferral of the gain for your 2017 return will be forthcoming shortly.
Q. Can I still elect to defer tax on that gain if I have already filed my 2017 tax return?
A. Yes. You may elect to defer the gain, but you will need to file an amended 2017 return. As part of that amended return, you will follow the election procedure described in the answer to the preceding question.
Q. I have comments that I would like to make on § 1400Z-2. How can I share those comments with the IRS?
A. Please send all comments to CC.ITA.Section.email@example.com.
The new U.S. tax law (Pub. L. No. 115-97) generally provides for the temporary deferral and potential for partial exclusion of gains reinvested in a qualified opportunity fund and the permanent exclusion of gains from the sale or exchange of an investment held for at least 10 years in a qualified opportunity fund.
The list of opportunity zones designations is regularly updated by Treasury’s Community Development Financial Institutions (CDFI) Fund.
For more information, contact a tax professional with KPMG’s Washington National Tax:
Susan Reaman | + 1 202-533-3541 | firstname.lastname@example.org
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