Additional COVID-19 Relief Issued by IRS
The IRS yesterday issued Notice 2021-10 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 Notice 2020-39, which was issued in June 2020.
The IPA joined a working group led by Novogradac in submitting a request for additional relief 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.
Institute for Portfolio Alternatives