Dear Members and Friends,
Opportunity Zones Regulation: The Office of Information and Regulatory Affairs (OIRA) today released final Opportunity Zone regulations after conducting a review process earlier this week. You can view the full draft of the final regulations on IRS.gov and supplementary information, including a FAQ, in a statement from the Treasury Department.
This final set of regulations will merge the first and second tranches of guidance issued earlier this year and will likely go into effect before year end.
The IPA has been actively involved in the ongoing conversation, including direct Treasury testimony, around the evolving Opportunity Zone regulations. While we are still digging into the latest regulations, you can view our comments on the first and second set of regulations on our website:
- Guidance Regarding Investing in Qualified Opportunity Funds (REG-115420-18)
- Treasury Department’s Hearing on Second Set of Qualified Opportunity Zone Regulations
Accredited Investor Definition: Following yesterday’s open meeting, the SEC today published in entirety the proposed rules for amending the accredited investor definition, which would allow more individuals and entities to participate in private capital markets. The IPA is continuing its review of the proposal and looks forward to providing comments and suggestions to the SEC.
IRS Notice 2007-55 Withdrawal: The IPA, along with the Invest in America Coalition and the Real Estate Roundtable, sent our support in early December for a bi-partisan Congressional letter sponsored by Sens. Johnny Isakson (R-GA) and Bob Menendez (D-NY) urging the Treasury Secretary to uphold congressional intent by withdrawing IRS Notice 2007-55. Repeal of IRS Notice 2007-55 would provide a significant boost to inbound investment in US real estate and infrastructure. Prior to Notice 2007-55, a domestically controlled REIT could sell its assets and liquidate, and the liquidation would be treated as a sale of stock (not subject to FIRPTA). The IRS Notice deviated from the longstanding tax treatment of these transactions and treats the liquidating distributions as a sale of the underlying real estate assets (subject to FIRPTA).