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NMHC & NAA to IRS: More O-Zone Changes, Please
The April 2019 guidance concerning the Opportunity Zones tax incentive provided a great deal of clarification on investment and development regulations. While the National Multi-Housing Council (NMHC) and the National Apartment Association (NAA) applauded the new guidance, both organizations noted that additional clarifications and changes to the program would be helpful.
The organizations partnered on submitted comments for consideration, which included:
- Making multifamily rehabilitation easier, by reducing the vacant property requirement from the five years proposed in the second guidance round, to one year.
- Enabling taxpayers to exit one Qualified Opportunity Fund and deposit those capital gains into another QOF, without losing Opportunity Zone tax credits.
- Allowing taxpayers to invest REIT capital gain dividends into a QOF 180 days following a REIT’s taxable year.
- Clarifying that investors can exclude capital gains from asset sales made by lower-tiered partnership, as long as an investment interest has been held for at least 10 years.
- Permitting an extension of Opportunity Zone capital deployment beyond the current 31 months for reasons behind an investor’s control, such as acts of God, natural disasters, financing delays, or labor disruptions. At this time, Government action delays can trigger such an extension.
NMHC is also preparing a response to a request for information recently issued by the U.S. Department of Housing and Urban Development (HUD). The RFI is asking for comments about how HUD programs can be improved or modified to benefit Opportunity Zones.
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