IRS Issues Notice Providing Transitional Guidance, Safe Harbors for Qualified Opportunity Zones

The IRS issued a notice announcing its intent to issue proposed regulations under I.R.C. §§ 1400Z-1 and 1400Z-2 reflecting amendments made by the One Big Beautiful Bill Act and provided transitional guidance for taxpayers and qualified opportunity funds (QOFs). The guidance addresses revised qualified opportunity zone (QOZ) designation periods, deferred gain recognition for taxpayers holding qualifying investments through December 31, 2026, and continued eligibility for certain QOZ benefits. The notice also provides transition relief and safe harbors allowing QOFs and qualified opportunity zone businesses (QOZBs) to continue satisfying certain tangible property and compliance testing requirements after QOZ designation periods expire, ...