Qualified Opportunity Zones

Below are questions submitted by the audience during our webinar Window of Opportunity: The IRS Issues Initial Guidance on Qualified Opportunity Zone Rules.  The webinar was on November 2, 2018.  Here’s the presentation from the webinar and our whitepaper on the new regulations.

  1. If I am a partner of a partnership and want to use the gain on an individual transaction by the partnership in 2018, what information must I receive from the partnership and do I have until the end of June 2019 for my investment?

You are right, if you are going to elect to defer gain at the partner level, the 180-day period does not begin until the last day of the partnership taxable year in which the realization event occurred—which is the date on which the partner “recognizes” its allocable share of the gain absent a partnership-level election to defer.  Given that (i) the gain occurred in 2018; and (ii) if the last day of the partnership taxable year is on December 31, 2018, you would have until the end of June 2019 to make the investment into a QOF.

As an alternative, you may elect to treat your own 180-day period as being the same as the partnership’s 180-day period (thus, it would begin on the date of the realization event in 2018).  The regulations are silent as to what information the partner willing to make such an election must obtain from the partnership, but presumably you would want documentation that provides assurance as to the amount of the gain and that the partnership will characterize the gain as “capital” (as opposed to “ordinary”) on your K-1.
Continue Reading

On October 19, 2018, the US Internal Revenue Service released initial guidance on the Qualified Opportunity Fund (QOF) rules. The QOF rules allow US taxpayers to defer capital gain taxation by investing an amount equal to the gain in a QOF within 180 days of the gain recognition event. While not answering every question, the

Here’s a link to Mayer Brown’s white paper – Window of Opportunity: the IRS Releases Initial Guidance on Qualified Opportunity Zone Rules.  The white paper discusses the proposed regulations and a revenue ruling that were released by the IRS on October 19.

The new rules address a number of issues that investors and sponsors were

I was a panelist at an event held at Mayer Brown’s New York office addressing Environmental, Social and Governance (“ESG”) investing on October 4.  On the panel, I addressed the tax benefits associated with certain ESG investments, with a focus on Qualified Opportunity Zone Funds and solar investment tax credits (ITC).  Here are the slides

We have published our whitepaper: Gain Deferral Using Qualified Opportunity Zone Investment Strategies Legal Update.  “Qualified Opportunity Zones” are not specific to renewable energy and do not involve tax credits but provide a powerful new tax benefits as a result of their enactment last year as part of the “Tax Cuts and Jobs Act.”