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Treasury to Combine Two Sets of Opportunity Zone Rules (1)

Sept. 17, 2019, 3:51 PMUpdated: Sept. 17, 2019, 4:36 PM

The Treasury Department intends to merge its two sets of proposed opportunity zone regulations into one set of final rules, an official said.

“We plan to combine the two sets of proposed regulations into one set of final regulations and we hope to get that done by the end of the year,” said Dan Kowalski, counsel to Treasury Secretary Steven Mnuchin, at a National Association of Local Housing Finance Agencies conference in Washington.

  • Kowalski added that a tax form for reporting the tax-advantaged investments will be released “soon.” GOP lawmakers removed reporting requirements for the incentives from the 2017 tax law that created them under procedural rules used to ward off a filibuster, and several senators introduced a bill (S. 1344) to reinstate those requirements in May.
  • The department released its first round of proposed rules for the tax law provision (REG-115420-18) in October 2018, and those mostly dealt with how the capital gains tax breaks work for real estate activities.
  • The next round (REG-120186-18), released in April, mainly dealt with operating businesses.
  • Under tax code Section 1400Z-2, investors who plug profits from stocks and other assets into opportunity funds that invest in designated census tracts throughout the U.S. can defer and reduce their capital gains tax liabilities.
(Adds comments from Dan Kowalski and context in first bullet. )

To contact the reporter on this story: Lydia O'Neal in Washington at loneal@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

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