OMB’s Office of Information and Regulatory Affairs (OIRA) reported that it has completed review of proposed regulations from the U.S. Treasury Department as guidance for qualified opportunity funds under section 1400Z-2—a provision of the U.S. tax law (Pub. L. No. 115-97, that is also known as the “Tax Cuts and Jobs Act” (TCJA)) enacted in December 2017.
OIRA completed its review on April 16, 2019. The U.S. Treasury Department and IRS will now be expected to release these proposed regulations since OIRA review is concluded.
The proposed regulations are identified on the OIRA website as:
OIRA describes these regulations, as follows:
This regulation provides rules under new 1400Z-2 of the Internal Revenue Code relating to how qualified opportunity funds will invest deferred gains into qualified opportunity zone property and qualified opportunity zone businesses. Specifically, the proposed regulation addresses what types of property qualify as qualified opportunity zone business property, and steps a qualified opportunity zone business must take to be a QOZB. Further, this regulation provides guidance on the penalty imposed for failure to meet the investment standard required by 1400Z-2(d). This regulation applies to qualified opportunity funds, and taxpayers who invest in such funds. These proposed regulations provide reporting requirements for QOFs when an investor divests from the QOF.
Treasury regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before being issued, pursuant to Executive Order 13771.
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