IRS to Publish Corrections, Correcting Amendments for Final OZ Regulations

Wednesday, August 4, 2021 - 9:45am

The Internal Revenue Service will publish in Thursday’s Federal Register corrections and correcting amendments to the final regulation for the opportunity zones (OZ) incentive released in December 2019 and published in the Federal Register in January 2020. The corrections include a clarification that startup businesses using the working capital safe harbor for property that would be nonqualified financial property except for the working capital safe harbor, are deemed to meet the 70% tangible property test during the working capital safe harbor period, while retaining the rule that the property is not treated as qualified OZ business property for any purpose. The correcting amendments change the language of both the preamble to the final regulations and the final regulations. The amendments are effective Thursday and are applicable on or after Jan. 13, 2020. The Opportunity Zones Working Group had requested the IRS address the issues included in the corrections.

Regulations and potential legislation concerning the OZ will be a focus of the Novogradac 2021 Fall Opportunity Zones Conference, Oct. 21-22 in Cleveland.