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The First OZ Deadline has Passed . . . What Now?


July 23, 2019

As anyone who has been paying attention to the Opportunity Zone program understands, the ability to defer taxes on capital gain depends a great deal on deadline adherence. The first such deadline took place in late June, 2019. On that date, investors with capital gains realized by Dec. 31, 2018, had to invest those gains into Qualified Opportunity Funds (QOFs) to take advantage of deferring taxes on those gains.

The good news? Though June 29 has come and gone, experts note that plenty of opportunities still exist for QOF investment and tax deferrals.

“June 2019 arose as a deadline only with respect to the 180-day rollover time limit,” said Walter Calvert, partner with Venable LLP. Calvert added that the deadline also applied to investors in partnerships and other certain pass-through entities with capital gain recognition at the end of 2018. “If the partnership itself hadn’t rolled over the gain, the investor or partner could have rolled over its share of the partnership’s gain, within that 180-day period,” he said.

What if a taxpayer did roll over that gain into a QOF, but didn’t make the election to defer the gain on the capital gain sale? “A 2018 amended return should be filed,” commented John Blake, CPA and Real Estate Group Chair with Klatzkin & Co. LLP.

About the Author

John focuses on helping with the tax needs of real estate, technology and manufacturing, distribution, and wholesale companies. He works with management and business owners to review their business plan, tax planning process, identify additional saving opportunities, and ensure compliance and reporting deadlines are met. Also, John helps educate clients about the new opportunities available...

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