On September 12, 2018, the Internal Revenue Service sent regulatory guidance on Qualified Opportunity Zones to the Office of Management and Budget’s Office of Information and Regulatory Affairs. The proposed rules are anticipated to clarify information for potential investors who have either set up Qualified Opportunity Funds or are waiting for further guidance before doing so. The OMB has 10 days to review the guidance, after which the IRS will publish the proposed and interim regulations. The IRS will then seek and review comments before publishing final regulations.

Individuals and entities who have recognized capital gains in the last six months from the sale of stock, art, real estate or other investments and are considering establishing a Qualified Opportunity Fund should consult a tax adviser.

Novogradac and Company LLP has published a mapping tool on its website showing where Qualified Opportunity Zones exist across the United States and in various U.S. territories.

We have worked with several clients who have set up Qualified Opportunity Funds to fund projects in Qualified Opportunity Zones. We can provide assistance in obtaining public/private financing for real estate development in Qualified Opportunity Zones by helping identify incentives that can be critical in assuring a positive outcome for this new tax strategy.

We will provide an update on the proposed and interim regulations when more information becomes available.