Qualified Opportunity Fund Partnership Investments Under 1400Z: Special Timing and Deferral Opportunities
Entity vs. Partner Deferral Election, Allocation Rules, Basis Step-Up
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Tax Preparer
- event Date
Thursday, August 29, 2019
- schedule Time
1:00 PM E.T.
- timer Program Length
110 minutes
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
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This course will provide tax advisers with a practical guide to the qualified opportunity zone (QOZ) tax incentives made available under Section 1400Z as they impact partnerships. The panel will discuss the mechanics of Section 1400Z and the proposed regulations issued in October 2018, as well as address the special rules unique to partnership investments in qualified opportunity funds (QOF). They will discuss how to qualify for tax benefits by investing in a QOF, the requirements to create and maintain QOFs and QOZ businesses, and critical areas of the law that remain uncertain.
The new QOZ provisions found in Section 1400Z of the Internal Revenue Code represent perhaps the most significant economic development tax incentive program in several decades. Section 1400Z allows taxpayers to defer and reduce the tax on capital gains by enabling taxpayers to reinvest capital gain proceeds in a QOF. These funds are established to inject investment capital into designated low-income communities to promote economic growth.
Section 1400Z allows any taxpayer--individuals, C corporations (including REITs), trusts, S corporations, and partnerships--may elect to defer gain on sale of stock reinvested in a QOF. The rules provide particular advantages for partnerships and other pass-through entities (PTEs) investing in QOFs, allowing the entity to choose between deferring gain at the partnership/PTE level or passing gain through to its partners, who may individually elect deferral.
The ability to choose deferral at the PTE level or the member/partner level provides significant benefits to PTEs. Tax advisers to PTEs must be able to discern the potential tax impact of entity-level vs. individual owner deferral.
Listen as our panel discusses the benefits of the new QOZ tax incentive program as an investment tool for partnerships and other PTEs and strategies for achieving optimal capital gains tax deferral or reduction results for owner/members of PTEs.
- Section 1400Z-2 opportunity zone provisions
- Processes and criteria designating QOZs
- Opportunity zone funds as the new class of investment vehicles and interests they can hold
- Specific tax incentives provided for in QOF investments
- Election flexibility for partnerships and other PTEs investing in QOFs
- Election at the entity level to defer
- Entity recognition of gain with election pushed down to partner/members
- Holding period and special rules when individual partners elect deferral
- Contrast QOF incentives with 1031 election results in a partnership context
- Filing and documentation requirements
The panel will review these and other key issues:
- What are QOZs and the eligibility requirements under IRC 1400Z?
- What are QOFs and QOZ businesses?
- How can taxpayers ensure the deferral or reduction of capital gains and the appreciation exclusion?
- Recent IRS guidance on gain deferral and the "substantially all" requirement imposed on QOZ businesses
- Specific IRS guidance on advantageous treatment of partnerships and other PTEs investing in QOFs
Learning Objectives
After completing this course, you will be able to:
- Determine what a QOZ is and the eligibility requirements under IRC 1400Z
- Identify QOFs and QOZ businesses
- Decide how taxpayers can ensure the deferral or reduction of capital gains and the appreciation exclusion
- Recognize the impact of recent IRS guidance on gain deferral and the "substantially all" requirement imposed on QOZ businesses
- Identify the uncertainties regarding 1400Z until the IRS provides additional guidance
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business and professional experience at mid-level within the organization advising investors about tax incentives, deductions and deferrals related to qualified opportunity zones (QOZs) and qualified opportunity funds (QOFs), capital gains, investment vehicles and qualified small business stock exclusions; familiarity with basis step-ups, partnership tax and rental real estate as a trade or business.
Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
