The Qualified Opportunity Zone Program has kept many investors paralyzed in uncertainty due to regulatory confusion. In the update below, we provide an overview of the highly sought-after guidance, which was recently released by the Internal Revenue Service (IRS) and the US Treasury Department… We have put together the following high-level overview of the 169-page guidance and will explain how the new clarifications will impact investors.
First let’s recap: Opportunity Zone Program
The original Opportunity Zone legislation left eager investors with more questions then answers. Below are some of the challenges that the guidance addresses.
Below are a few of the key clarifications giving investors the confidence to move forward:
The IRS also provided several situations where deferred gains may become taxable. If an investor transfers their interest in a QOF, e.g., if the transfer is done by gift, the deferred gain may become taxable. However, inheritance by a surviving spouse is not a taxable transfer, nor is a transfer, upon death, of an ownership interest in a QOF to an estate or a revocable trust that becomes irrevocable upon death.
We encourage you to read the update in its entirety as it includes additional guidance on the term “original use,” and addresses all the issues mentioned above. If you are still hesitant about moving forward with this investment opportunity, the professionals in our office can help provide clarity, address your concerns and answer any specific questions you may have.
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