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  • Dr. Mark Lee Levine, Professor

Qualified Opportunity Zones--Timing and Extensions

Recently, the Internal Revenue Service (IRS) issued an important document, Notice 2020-39, 2020-26 IRB, IR 2020-114 for those attempting to meet timing requirements when investing in Qualified Opportunity Zone (QOZ) Funds. This Notice was issued on June 4, 2020.

In a prior Tip, this timing issue was examined (See Tax Codes 1031, 1400z, and Timing), as well as the issue of the possible extensions of the time-periods involved in investing in Qualified Opportunity Zone (QOZ) Funds.


Without attempting to review all of the prior points, the summary position is:


1. Congress enacted, in 2017, Internal Revenue Code Section 1400Z, allowing for investors to postpone (and/or eliminate some capital gain), if the investor met the requirements of this Code Section.


2. One of the requirements of Code Section 1400Z is for the investor to place the capital gain from a disposition and reinvest, timely, within what is known as a QOZ FUND.


3. The requirement to reinvest, timely, is within this Code Section. That timeframe has generally required the reinvestment period to be 180 days.


4. On March 13, 2020, the President of the USA issued an emergency Declaration in connection with the COVID-19 pandemic. That Declaration instructed the Secretary of the Treasury to provide relief from tax deadlines.


5. Consistent with the above authority, the time for investors to meet the 180 day reinvestment period was extended under Notice 2020-23. This extension, where qualified, allowed investors until 7/15/2020 to timely invest in a QOZ Fund and avoid the current taxation of the capital gain that was generated.


6. The most recent change that was issued under Notice 2020-39 provides for relief from many deadlines related to QOZ Funds. One area of relief in particular is the timing rule under Code Section 1400Z-2(a). That is, the 180 day limit, even as modified, above, was further extended.

Under the newest extension per Notice 2020-23, the qualified taxpayer attempting to come within Code Section 1400Z now has until December 31, 2020 to meet the timing reinvestment requirement. (This is for investments where the last day of the 180 period falls on or after April 1, 2020 and before December 31, 2020.)

Other issues of timing and investing in QOZ Funds were also addressed in Notice 2020-39..

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Dr. Mark Lee Levine,

Professor, University of Denver

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