Extra Time to Invest in Qualified Opportunity Funds
If you recognized capital gains in late 2019 or early 2020, it’s not too late to reinvest those gains in a Qualified Opportunity Fund (QOF). QOFs are funds that invest in one of nearly 9,000 economically distressed Qualified Opportunity Zones designated by the Tax Cuts and Jobs Act. QOF investors enjoy a variety of benefits, including deferral of tax on reinvested gains and permanent reduction of gains on investments that meet certain holding period requirements.
Generally, to qualify for these benefits, you must invest gains in a QOF within 180 days after the sale or exchange of the capital assets that generated them. But in Notice 2020-39, the IRS extended this deadline. If you sold assets for a gain that’s eligible for investment in a QOF, and the 180th day would have fallen on or after April 1, 2020, and before December 31, 2020, you now have until December 31, 2020, to invest that gain in a QOF.
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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