On July 1, Nareit submitted comments to the IRS and Treasury Department commending them for the recently-issued second set of proposed qualified opportunity zone (QOZ) regulations. The QOZ provision was enacted as part of 2017’s tax reform law and encourages long-term investment in low-income communities (opportunity zones) through deferral (and potential elimination) of “gains.” Nareit had submitted comments on Dec. 26, 2018 on the first set of QOZ regulations issued in 2018.
As in 2018, again Nareit recommended that the final regulations clearly define gain eligible for deferral as including any items of gross gain from depreciable real and personal property used in a trade or business (as defined in section 1231(b)). Nareit also recommended that the 180-day deferral period (within which gains may be deferred) for capital gain dividends of REIT shareholders begin 30 days after the close of the REIT’s taxable year. Similar recommendations were included in comments filed by the U.S. Chamber of Commerce in 2018 and the Real Estate Roundtable in 2018 (and expected to be filed in 2019). Nareit also made a number of other technical recommendations.
For more information, see the IRS FAQs on qualified opportunity zones and Nareit’s qualified opportunity zone webpage.
(Contact: Dara Bernstein at dbernstein@nareit.com)