Copyright: Serghei Starus
This week, the Internal Revenue Service (IRS) on June 4 provided relief for qualified opportunity funds and investors impacted by COVID-19. Specifically, Notice 2020-39 provides that:
- Taxpayers have until December 31, 2020, to make an investment in a Qualified Opportunity Fund if their 180-day deadline to do so ended on or after April 1, 2020, and before December 31, 2020;
- If a Qualified Opportunity Fund has a deadline to meet the 90 percent investment asset test that is between April 1, 2020, and before December 31, 2020, failure to comply is deemed to be due to reasonable cause;
- The 30-month substantial improvement period for property held by Qualified Opportunity Funds or qualified opportunity zone businesses is tolled for the period beginning on April 1, 2020, and ending on December 31, 2020;
- The working capital safe harbor is extended by 24 months for working capital assets held by qualified opportunity zone businesses before December 31, 2020 (so long as other working capital safe harbor requirements are met); and
- The 12-month deadline for Qualified Opportunity Funds to reinvest capital is extended by 12 months so long as the original reinvestment period included January 20, 2020, and other requirements are met including that proceeds are invested in the manner originally intended before January 20, 2020.
NMHC will continue to keep members apprised of ongoing legislative and regulatory actions related to Opportunity Zones. For more information on NMHC’s advocacy work during the COVID-19 crisis, please visit the NMHC COVID-19 Hub.
