Federal Qualified Opportunity Zones: Proposed Regulations Under Review
The second round of proposed regulations under Section 1400Z-2 of the Internal Revenue Code are now under review at the Office of Information and Regulatory Affairs (“OIRA”).
The OIRA website stated that this round of regulations will address:
- Which types of property qualify as qualified opportunity zone business property; and steps a qualified opportunity zone business must take to be qualified.
- Guidance on the penalty imposed for failure to meet the investment standard required by Section 1400Z-2(d).
- How qualified opportunity funds will invest deferred gains into qualified opportunity zone property and qualified opportunity zone businesses.
OIRA has a mandated 10-day minimum review period, although the first set of proposed regulations were in review for over a month. According to a treasury official, there likely will be a third set of proposed regulations issued to address anti-abuse and the decertification process.
What Does CohnReznick Think?This second set of proposed regulations will continue to provide much-needed guidance to taxpayers who are eager to invest capital gain dollars into qualified opportunity zones funds. Upon release of the second set of proposed regulations, CohnReznick will provide a summary of what they contain, including our analysis.
For more information on Opportunity Zones, please contact:
Steve Friedman, CRE, FRICS, Tax Director, (301) 280-1849
David Kessler, Chief Executive Officer, (301) 657-7755
Beth Mullen, CPA, Partner - Affordable Housing Industry Leader, (916) 930-5750
Brian Newman, CPA, Partner, Practice Leader - Federal Tax Services, (959) 200-7009
Thomas Nice, CPA, Partner, (301) 961-5542
Ira Weinstein, Managing Principal - Baltimore, (410) 783-8328
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Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.