Opportunity Zones News

Opportunity Zones – Additional Changes from the IRS

The IRS provided welcome, additional pandemic-related relief to Opportunity Zone investors and opportunity funds today. 

 

IRS Notice 2020-39 includes five key changes and clarifications:

  1. If the 180-day investment period to roll gain into an opportunity fund would have expired between 4/1/20 and 12/31/20, the deadline is extended to 12/31/20.
     

  2. If an opportunity has a compliance date for the 90% investment asset test that falls between 4/1/20 and 12/31/20, failure to comply is automatically excused under the reasonable cause exception.
     

  3. The 30-month substantial improvement period for real property owned by an opportunity fund or opportunity zone business is tolled from 4/1/20 through 12/31/20.
     

  4. The IRS has clarified that the working capital safe harbor for opportunity fund working capital assets is extended under the President’s emergency declaration by 24 months (for a total period of 55 months) if the working capital is held by the fund before 12/31/20 and the other requirements for the safe harbor are met.
     

  5. The 12-month period for an opportunity fund to reinvest proceeds from the return of capital or disposition of property is extended by an additional 12 months if the original period included 1/20/20, the date of FEMA’s major disaster declaration and other requirements are met. 

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