The IRS released for publication in the Federal Register proposed regulations (REG-121095-19) addressing the requirements for certain foreign persons and foreign-owned partnerships investing in qualified opportunity funds (QOFs) and also providing flexibility with regard to working capital safe harbor plans. The summary for the proposed regs is as follows:
This document contains proposed regulations that include requirements that certain foreign persons and certain foreign-owned partnerships must meet in order to elect the Federal income tax benefits provided by section 1400Z-2 of the Internal Revenue Code (Code). This document also contains proposed regulations that allow, under certain circumstances, for the reduction or elimination of withholding under section 1445, 1446(a), or 1446(f) of the Code on transfers that give rise to gain that is deferred under section 1400Z-2(a). Finally, this document contains additional guidance regarding the 24-month extension of the working capital safe harbor in the case of Federally declared disasters. The proposed regulations affect qualified opportunity funds and their investors.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.
