On Dec. 19, 2019, the IRS released a long-awaited gift to the tax and investment communities. A robust 544-page dissertation in the form of final Qualified Opportunity Zone regulations. The proposed guidance issued prior to the release of these final regulations left many unanswered questions and produced more than a few perplexing outcomes.

The many investors already leveraging the recently created Qualified Opportunity Zone program are continually asking whether a Qualified Opportunity Fund (QOF) should hold a single asset or, in the interest of diversification and economies, multiple assets. With the benefits of a single capital raise, a single fund is enticing – and it may bring less uncertainty to the table.

The economic divide in large cities continues to expand. Despite a financial resurgence following the 2007-2009 recession, the system wasn’t fixing itself. Enter Qualified Opportunity Zones (QOZ), a program included in the Tax Cuts and Jobs Act of 2017 designed to boost development in economically distressed communities. In exchange for new investments in these communities, investors receive preferential tax treatment.

When depreciable and real property (usually buildings and equipment) used in a trade or business and held for more than one year is sold, the result is typically something called “Section 1231 gain.” Absent recapture rules, this gain is treated as capital gain, but it must first be netted against any losses from other sales of 1231 property during the tax year.

The IRS has issued a much-anticipated second round of proposed regulations better outlining the framework of the Qualified Opportunity Zone (QOZ) program. Operating businesses that have been waiting on the QOZ sidelines should now have enough clarity to begin to tap into the program’s benefits.

Just in time for the tax filing season, the IRS has released nearly 250 pages of final regulations regarding the §199A pass-through deduction. The IRS issued previous guidance on the §199A pass-through deduction in August 2018, however, even this final guidance has not answered all questions related to the new deduction. Even so, there are many significant updates in the IRS’s final regulations, which are explained below.

The Tax Cuts and Jobs Act (TCJA) was the most sweeping overhaul of the U.S. tax code in more than three decades, and its changes will impact nearly every 2018 federal income tax return. As the year draws to a close, now is the time to consider year-end tax planning strategies to help you maximize deductions and minimize your tax bill – for this year and the year ahead.

Prior to the Tax Cuts and Jobs Act (TCJA), signed into law in December 2017, taxpayers were allowed an itemized deduction for state and local taxes paid without any limit on the amount of such deduction. The TCJA limited the state and local tax deduction, for individuals, to a maximum of $10,000. As a result, some states contemplated the creation of new state charitable funds, the donations to which would qualify for a state tax credit. Since charitable contributions are only limited by a taxpayer’s adjusted gross income, taxpayers that contributed to the state charitable funds, in lieu of paying state income tax, would generally receive a greater federal itemized tax deduction.

It took a little over eight months, but the IRS has issued much-anticipated proposed regulations regarding the 20 percent pass-through deduction provided under Section 199A. The 184 pages of proposed regulations provide answers to some, but not all, of the questions considered since the Tax Cuts and Jobs Act (TCJA) was signed into law on Dec. 22, 2017. Since TCJA was enacted, tax advisors have counseled clients to 'stand your ground' and refrain from any radical structure modifications in response to the new provision. Those that heeded this advice will likely be thankful they did.

In an effort to boost development in economically distressed communities, many federal incentive programs have been created over the years, such as the New Markets Tax Credit, Empowerment Zones, Renewal Communities, and more. The Tax Cuts and Jobs Act (TCJA) of 2017 has created yet another incentive to invest in these areas, and the potential tax benefits are significant.