Start planning 179 days after the gain recognition event if the taxpayer is an individual. If it is an LLC, a partnership or an S corp, then start the process 180 days after the tax return is due.
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What is the best way for investors to start planning for investing in Opportunity Zones?
When do they need to reinvest their deferred gain in a Qualified Opportunity Fund?
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They will need to hire an experienced attorney familiar with this type of structuring. The investment must be within 180 days of the qualifying capital gain triggering event or 180 days from the end of the partnership tax year. Notice 2020-39 provides extensions to these rules to make a qualifying investment. Investors should be comfortable with the underlying fundamentals of their investment to make a qualified investment. If they are not, then I would advise not investing as the tax benefits will not make a bad investment a good investment.
The timer may start and end at different times depending on the source and nature of the gain. You should consult with a tax professional to find out the way the 180-day deadline would work for a specific set of circumstances.
The general rule for investing is the 180 days that starts on the day the gain is recognized. There are various rules for gains from pass-through entities, etc. So be sure to check with an advisor or read the guidance.
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