Skip to main content

Additional COVID-19 Relief Issued by IRS

Colleagues,

The IRS yesterday issued which extends relief to Qualified Opportunity Funds (QOFs) and their investors as a response to continued challenges brought on by the COVID-19 pandemic. The notice extends previous relief provided by , which was issued in June 2020.

The IPA joined a working group led by Novogradac in submitting a from the IRS in December 2020.

Relief provided in Notice 2021-10 includes:

  • 180-day investment period – The 180-day window to invest capital gains has been extended to March 31 for all taxpayers whose last day of the 180-day deadline fell between April 1, 2020 to March 31, 2021.
  • 30-month substantial improvement period – The period is now delayed from April 1, 2020 through March 31, 2021.
  • 90% investment standard for QOFs – Failure by a QOF to satisfy the 90% investment standard is considered reasonable if the last day of its first six-month period of a taxable year or last day of a taxable year falls from April 1, 2020 through June 30, 2021.
  • Working capital safe harbor for OZ businesses – All OZ businesses holding working capital assets intended to be covered by the working capital safe harbor before June 30, 2021 receive up to an additional 24 months.
  • 12-month reinvestment period – If a QOF’s 12-month reinvestment period includes June 30, 2020, the QOF receives up to an additional 12 months to reinvest.

If you have any questions, please don’t hesitate to reach out to or .

Thank you,

Institute for Portfolio Alternatives