IRS Provides Additional Guidance on Qualified Opportunity Zones

Posted by Kim Chen on July 31st, 2019

The IRS has released guidance that amplifies Notice 2018-48 , which lists the population census tracts that the IRS designated as Qualified Opportunity Zones (QOZs). Specifically, the agency has added two additional census tracts in Puerto Rico that have been designated as QOZs under IRC Sec. 1400Z-1(b)(3). Also, the IRS has published a Frequently Asked Question (FAQ) that clarifies that a taxpayer can make a valid deferral election on Section 1231 gain invested in a Qualified Opportunity Fund (QOF) if (1) the amount was invested before the last day of the 2018 tax year, but during the 180-day period beginning with the realization event and (2) the amount invested was less than the taxpayer’s 2018 net Section 1231 gain. This FAQ is in response to regulations proposed in April 2019, which implemented a Section 1231 netting rule. The FAQ can be accessed at www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions . Notice 2019-42 .
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