Foreign Opportunity Zone Investors Face Hurdles Under New Rules

Tax advisers are doubtful that new proposed IRS rules for foreign investors in tax-advantaged opportunity funds would make the incentives worthwhile for many.

The proposed rules (REG-121095-19; RIN 1545-BP50), released April 12, predominantly lay out how foreign investors can benefit from the incentives and also clarify a Covid-19 relief measure the IRS offered investors last year. But only non-U.S. investors with large amounts of capital gains to throw around may ultimately be interested, tax professionals say.

That’s because foreign investors will have hoops to jump through to benefit from the tax breaks, which were created in ...