Opportunity Zones deadlines

INCENTIVES ALERT: Internal Revenue Service extends Opportunity Zone deadlines

Internal Revenue Service extends deadlines for Opportunity Zones

Recent announcement to provide critical relief for investors of the Opportunity Zones program

In response to the COVID-19 pandemic and the swift impacts to the economy, particularly related to capital gains and the stock market, the Internal Revenue Service (IRS) extended key deadlines for the federal opportunity zone program. These critical extensions were announced through IRS Notice 2020-39, which is among a series of recent rulemakings from the federal agency since the onset of the crisis.

Key deadline extensions and relief mechanisms from the latest notice include:

Extension of the 180-Day Investment Requirement for Qualified Opportunity Funds (QOF) Investors
If a taxpayer’s 180th day to invest in a QOF would have fallen between April 1, 2020 and before December 31, 2020, the taxpayer can now invest the eligible capital gain until December 31, 2020. The previous deadline had already been extended to July 15th, 2020 earlier in the crisis.

Relief from 90% Investment Standard for QOFs
If a QOF fails to meet the 90% investment standard between April 1, 2020 through December 31, 2020 due to COVID-19, the QOF will be deemed satisfactory for the standard and will not incur any penalties.

Working Capital Safe Harbor Extension for Qualified Opportunity Zone Businesses
Due to the pandemic, if Qualified Opportunity Zone Businesses meet the 31-month working capital safe harbor regulations, they may now have an additional 24-months to expend the working capital.

Suspension of 30-Month Substantial Improvement Period for QOFs
For eligible investments of existing tangible property, the 30-month substantial investment period has been suspended for the period of April 1, 2020 through December 31, 2020.

Additional 12-Month Reinvestment Period for QOFs
Investors receiving distributions, partnership interests, and/or realized proceeds may have an additional 12 months to reinvest the funds.

To learn more about the dynamic opportunity zone program, please download our latest brief: