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New Proposed Regulations on Qualified Opportunity Funds Released

The United States Department of Treasury issued additional Proposed Regulations on investments in Qualified Opportunity Funds yesterday, April 17, 2019 (available here).  We are currently reviewing the recently issued guidance and will send out an additional Client Alert with commentary.  While we work to further analyze the new guidance, we anticipate clarification on a variety of issues that may have otherwise caused hesitation by many investors.

As part of the Tax Cuts and Jobs Act signed into law in December 2017, new Section 1400Z-2 was added to the Internal Revenue Code to encourage investments in low-income communities through Qualified Opportunity Funds.  Under this new Section, taxpayers that sell certain appreciated assets and invest in Qualified Opportunity Funds may potentially (i) defer capital gain from the sale of the assets, (ii) reduce the deferred capital gain, and (iii) eliminate future gain arising out of appreciation in the Qualified Opportunity Fund investment.  

The Department of Treasury previously released initial guidance on the rules for qualifying investments in Qualified Opportunity Funds, including Proposed Regulations and a Revenue Ruling. 

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About this Author

Justin Wallace Tax Attorney Hill Ward Henderson

Justin is an Associate in the firm’s Corporate & Tax Group.  His practice primarily involves federal and state tax planning and advice for business transactions.  He also engages in general business and corporate matters. 

During law school at the Florida State University, Justin was a member of the Florida State University Law Review and a Judicial Intern for Chief Justice Ricky Polston of the Florida Supreme Court.  After graduating from law school, Justin obtained his LL.M. in Taxation from New York University School of Law, where he received the...