IRS issues guidance relating to deferral of gains for investments in a Qualified Opportunity Fund

IR-2019-75, April 17, 2019

WASHINGTON –The Internal Revenue Service today issued guidance (PDF) providing additional details about investment in qualified opportunity zones.

The proposed regulations allow the deferral of all or part of a gain that is invested into a Qualified Opportunity Fund (QO Fund) that would otherwise be includible in income. The gain is deferred until the investment is sold or exchanged or Dec. 31, 2026, whichever is earlier. If the investment is held for at least 10 years, investors may be able to permanently exclude gain from the sale or exchange of an investment in a QO Fund.

Qualified opportunity zone business property is tangible property used in a trade or business of the QO Fund if the property was purchased after Dec. 31, 2017. The guidance permits tangible property acquired after Dec. 31, 2017, under a market rate lease to qualify as “qualified opportunity zone business property” if during substantially all of the holding period of the property, substantially all of the use of the property was in a qualified opportunity zone.

A key part of the newly released guidance clarifies the ”substantially all” requirements for the holding period and use of the tangible business property:

For use of the property, at least 70 percent of the property must be used in a qualified opportunity zone.
For the holding period of the property, tangible property must be qualified opportunity zone business property for at least 90 percent of the QO Fund’s or qualified opportunity zone business’s holding period.
The partnership or corporation must be a qualified opportunity zone business for at least 90 percent of the QO Fund’s holding period.
The guidance notes there are situations where deferred gains may become taxable if an investor transfers their interest in a QO Fund. For example, if the transfer is done by gift the deferred gain may become taxable. However, inheritance by a surviving spouse is not a taxable transfer, nor is a transfer, upon death, of an ownership interest in a QO Fund to an estate or a revocable trust that becomes irrevocable upon death.

The guidance (PDF) is posted on IRS.gov. These regulations relate to the Tax Cuts and Jobs Act (TCJA), the tax reform legislation enacted in December 2017.

For information about other TCJA provisions, visit IRS.gov/taxreform.

GRKB receives recognition at the BBB’s 2018 Central MA Awards for Marketplace Excellence

On Wednesday, November 14, 2018, The Better Business Bureau of Central New England hosted their annual Central MA Awards for Marketplace Excellence at the Manor in West Boylston. Greenberg, Rosenblatt, Kull & Bitsoli, P.C. (GRKB) Senior Vice President, Rick Powell, serves as Chairman of the Board of the Better Business Bureau. During the Awards program, GRKB was recognized with a President’s Club Award for celebrating 46 years of membership. GRKB employees Courtney Miller and Brendan Robertson attended the event and graciously accepted the award.

Pictured left to right: Nancy Cahalen, President and CEO of the BBB; Brendan Robertson, Courtney Miller, and Rick Powell from GRKB

In memory of Mary H. Sweet

Our thoughts and prayers are with the family and friends of our long-term employee and friend, Mary Sweet, who passed away October 26, 2018 at the age of 73. We’re grateful for all of the years spent together and memories made during the 31 years that Mary worked with GRKB.

Full Obituary for Mary can be found here:
https://www.legacy.com/obituaries/telegram/obituary.aspx?n=mary-sweet&pid=190588498&fhid=20762

RICHARD F. POWELL, CPA, NAMED CHAIR OF THE AUDIT COMMITTEE OF THE DIOCESE OF WORCESTER

Worcester, MA—Greenberg, Rosenblatt, Kull & Bitsoli, P.C. (GRKB), one of the region’s leading CPA firms, is honored to announce that on June 29, 2017, Bishop McManus named Richard F. Powell, CPA, as Chair of the Audit Committee for the Diocese of Worcester. Rick, a shareholder of GRKB, has been a member of the Diocesan Finance Committee since 2015.

How to know it’s really the IRS calling or knocking on your door

Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee.

The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail.

Read the complete IRS article at: https://www.irs.gov/uac/newsroom/how-to-know-it-s-really-the-irs-calling-or-knocking-on-your-door

GREENBERG, ROSENBLATT, KULL & BITSOLI, P.C. ANNOUNCES NEW HIRE

John A. Guarnotta, CPA, MST, MBA, has joined GRKB as a Tax Manager. Mr. Guarnotta has over 20 years’ experience in public accounting and was most recently with the CPA firm of Morris & Morris.  Prior to that, he was a Tax Manager at Gray, Gray & Gray.  He specializes in tax planning and compliance for individuals and privately-held businesses; multi-state tax matters; and representing clients under audit.  Mr. Guarnotta is a member of the AICPA and MSCPA.  He received his BS from Stonehill College; his MBA from Boston College; and his MST from Bentley University.