Inside the Opportunity Zone Relief Benefits
Commercial real estate attorney Phil Jelsma gives us an inside look at the IRS extensions and guidance for opportunity zones.
July 2, 2020 | Kelsi Maree Borland | GlobeSt.com
Last month, the IRS released new guidance for opportunity zone investments in relation to the pandemic. The benefits are potentially significant for opportunity zone investors, and extend several key deadlines. We talked to commercial real estate attorney Phil Jelsma, a partner and chair of the tax practice team at Crosbie Gliner Schiffman Southard & Swanson, to get some insight about IRS notice. Here are the key insights for opportunity zone investments.
• 180-Day Investment Requirement for Qualified Opportunity Zone Investors
Typically, investors have 180 days to reinvest capital gains in an opportunity zone fund and take advantage of the tax benefit. At the start of the pandemic, the deadline was delayed, but now it has been extended further. “Previously in Notice 2020-23, the IRS had extended the 180-day period for taxpayers whose 180-day investment period fell after April 1, 2020 until July 15, 2020,” says Jelsma. “Notice 2020-39 now extends that date until December 31, 2020. For example, if investor sold all of his or her stock on December 1, 2019 for a gain of $5 million, then the investor would normally have until May 28, 2020 to invest in a QOF. Now investor would have until December 31, 2020 to invest his or her capital gain in a QOF. The capital gain will be otherwise taxable for California income tax purposes.”
