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Final O-Zone Regulations Submitted to OIRA for Review
The IRS completed final regulations on Qualified Opportunity Funds (QOF), and forwarded them to the Office of Information and Regulatory Affairs (OIRA). The department is a division of the White House Office of Management and Budget, and it has 30 days to review the regulations. Once the regulations have been approved, the rulemaking will be published by the Office of the Federal Register.
It’s unclear if the regulations will be published before the end of 2019, though the Novogradac Opportunity Zones Working Group requested that the regulations be published either before Dec. 21, 2019, or after the first of the year.
According to OpportunityDB, the final set of regulations should merge and clean up the first and second tranches of proposed guidance, with the final version anticipated to be more than 500 pages in length. Some of the issues that will likely be clarified include:
- Data collection and reporting, and what the U.S. Department of the Treasury limits could be
- Multi-asset fund exit operations, and discrepancies existing between tax treatment at QOF, Qualified Opportunity Zone Business and Qualified Opportunity Zone Business Partnership levels
- Whether the substantial improvement test can be conducted on an aggregate basis, versus an asset-by-asset basis
- Treatment of debt-financed distributions
- Treatment of Section 1231 gains
- Definition of vacant property
- How to pair the incentive with real estate tax credits
For comments, questions or concerns, please contact Amy Sorter
