IRS Notice 2021-10 Moves the Deadline to March 31

Typically, taxpayers who want to defer paying taxes on capital gains must reinvest their realized gain into a Qualified Opportunity Zone Fund within a 180-day period after the date of sale. Due to the pandemic, though, the 180-day period was extended last year until 12-31-2020. 

The IRS has since released a notice that further extends the deadline to March 31, 2021. 

What This Means to Investors

Taxpayers whose 180-day period ended on or after April 1, 2020 now have until March 31, 2021 to reinvest their capital gain to get the deferral and reduction in their capital gains taxes – and the tax-free investment in the OZ Fund. Qualifying gains are those realized on or after October 4, 2019 by individuals. For taxpayers wanting to reinvest a gain from a partnership, the new deadline applies to recognized partnership gains on or after January 1, 2019.

The extension is automatic.  Taxpayers will need to make a valid deferral election using forms 8949 and 8997.

What This Means to Opportunity Zone Funds

Various deadlines and testing requirements for Qualified Opportunity Zone Funds were also loosened. The Nest Opportunity Fund doesn’t need this due to the short cycle of our property rehabs, but the assistance for investors will help us further invest in residential real estate in Columbus and Lexington – and continue being, in our potentially biased opinion, the best Ohio opportunity fund and Kentucky opportunity fund out there. 

For questions on your specific circumstances, please contact us for a brief call.