On December 19, 2019, the IRS and the U.S. Department of the Treasury released the final regulations on investing in Qualified Opportunity (QO) Funds. The 544-pages of regulations address many areas, just a few of which are listed below:

• Taxpayers can invest the entire amount of Section 1231 gains without regard to losses, and change the beginning of the investment period from end of the year to the date of the sale of each asset.
• Gains from installment sales can be invested when received, even if the initial installment payment was made before 2018.
• Nonresident alien individuals and foreign corporations may make QO Zone investments with capital gains that are effectively connected to a U.S. trade or business.
• Capital gain from the sale of property sold by a QO Zone Business that is held by a QO Fund may be excluded from income as long as the investor’s qualifying investment in the QO Fund has been held for 10 years.
• The period of time a building needs to be vacant to be considered original use property is reduced from five years to three years.

These much anticipated final regulations will help investors take full advantage of the federal program. Look for more comprehensive coverage of the regulations available on our site soon.

Please contact Dave Sobochan at dsobochan@cohencpa.com, Adam Hill at ahill@cohencpa.com or Angel Rice at arice@cohencpa.com for further discussion.

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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.