Posted on June 05, 2020
The IRS has released Notice 2020-39, extending critical Opportunity Zone deadlines.
Now, an investor whose 180 day period to invest in a Qualified Opportunity Fund (QOF) expired on or after April 1, 2020, but before December 31, 2020, can make that investment up to December 31, 2020.
This extension allows taxpayers who realized gains at any period from the fourth quarter of 2019 until April 1, 2020 to invest those funds into a QOF before the end of 2020. This extension will give taxpayers the maximum ability to realize significant tax advantages through the investment of capital gains in Opportunity Zones.
Additionally, the Notice provides that the period of April 1, 2020 through December 31, 2020 is not counted for purpose of the 30 month substantial improvement period. This allows Opportunity Zone projects that were stalled as a result of the mitigation efforts of COVID-19 to be continued as qualified OZ projects.
Further, the IRS provided leniency for penalties related to the 90% asset semi-annual testing requirements if the testing periods fall between April 1, 2020 and December 31, 2020.