On April 17, 2019, the US Department of the Treasury issued a second set of proposed regulations on Qualified Opportunity Zones (QOZs). These proposals provide highly anticipated guidance on many questions not answered by the first set of regulations.
QOZs allow investors to receive significant tax benefits while injecting capital into economically distressed communities.
Proposed Changes
The new proposed regulations address a number of taxpayer concerns, including the following:
- The treatment of Section 1231 gains
- Rules that treat certain cash distributions within two years as disguised sales that potentially disqualify QOZ benefits
- Clarification that the issuance of a profits interest including a carried interest won’t qualify for the benefit
- Other events that will trigger the deferred capital gain
- Favorable guidance for leased property
- Clarification that land doesn’t need to be substantially improved
For additional information on the opportunity zone program, please see this Insight, which has been updated to reflect these changes.
We’re Here to Help
To learn more about the proposed regulations or how you can benefit from QOZs, contact your Moss Adams professional.