On December 27, 2018, the American College of Trust and Estate Counsel (ACTEC) submitted comments to the IRS on proposed regulations on Qualified Opportunity Zones under Internal Revenue Code § 1400Z-2. This code section provides a tax incentive designed to promote investment in certain designated economically-distressed communities referred to as “Opportunity Zones.” Investment in these Opportunity Zones provides for preferential tax treatment, including the deferral of gain, and, in certain circumstances, the elimination of gain, on the investment.
In its comments, ACTEC requested the following:
- Clarification concerning the income tax consequences resulting from the death of a taxpayer who has deferred gain through a timely reinvestment of gain in a Qualified Opportunity Fund (“QOF”), and to provide relief for successors-in-interest.
- Clarification concerning the income tax consequences resulting from the gift of an interest in a QOF where the donor has deferred gain through a timely reinvestment of gain in a QOF.
- Clarification concerning grantor trusts, including confirmation that a transaction with a grantor trust that is disregarded for income tax purposes pursuant to Rev. Rul. 85-13 should not be considered a sale or exchange of an interest in a QOF.
- Relief to extend the 180-day period for rollover of gain to a QOF be granted to partners, S corporation shareholders and beneficiaries of estates and trusts because they may not receive a Schedule K-1 indicating capital gains until more than 180 days after the end of the taxable year.
ACTEC Seeks Opportunity Zone Guidance for Trusts, Estates. Tax Notes Today, a product of Tax Analysts. Jan. 9, 2019