The 2017 Tax Cut and Jobs Act included significant new tax
benefits for investments in qualified opportunity zones.
Specifically, taxpayers can defer tax recognition on capital gains
when the gains are reinvested in a qualified opportunity fund,
which is a partnership or corporation that invests in qualified
opportunity zones. In addition, the gains from the investment in
the fund can be permanently eliminated if the investment is held
for at least 10 years.
Qualified opportunity zones are a new concept, and tax
practitioners and investors have been eagerly awaiting guidance on
how these new rules will be implemented. The IRS released its first
round of guidance on Friday, in the form of proposed regulations
and a revenue ruling. This guidance clarified several important
issues. For example, qualified opportunity zone property includes
tangible property if the qualified opportunity fund substantially
improves tangible property located in a qualified opportunity
