Other than the coronavirus-related extensions the IRS issued, which have since expired, there is no extension to the 180-day period. You can start the period flexibly for K-1 pass-through gains, however, so you can check out those rules.
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What happens if I can’t reinvest my deferred gains within 180 days in a Qualified Opportunity Fund?
Is there any flexibility with this timeframe or exceptions I can apply for?
Answers
Unfortunately, you must invest your deferred gain in a QOF within the 180-day period in order to obtain OZ benefits. The IRS had extended this period in response to COVID, but only to March 31, 2021, so that relief no longer applies. While there isn't any flexibility with the duration of the period itself, there may be flexibility with its starting point, if you recognized your gain through a pass-through entity. In that case, you could elect to start the 180-day on the last day of the entity's tax year or the filing date (without extensions) for its annual income tax return.
Unfournatly, the 180-day rule is a strict rule that requires investors to invest amounts equaling their eligible gains into a Qualified Opportunity Fund within 180 days, or lose the ability to invest those eligible gains and qualify for the Opportunity Zone tax incentives.
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