Overview
IRS Releases Regulations on Opportunity Zone Investments: Today, the Treasury Department and the IRS released proposed regulations clarifying rules for investments in qualified opportunity zones (QOZs). The opportunity zones provision is an incentive created by the Tax Cuts and Jobs Act and is designed to encourage investment in distressed communities. The regulations clarify that all capital gains qualify for deferral, and corporations, pass-through entities, and individuals may make such investments. The rules also provide clarity as to the requirements for meeting the assets tests, and allow taxpayers to make the basis step-up election after the expiration of the zone designations through 2047. The proposed rules provide that taxpayers may rely on them if the taxpayer applies the rules for the respective subsection in their entirety and in a consistent manner.
IRS Issues Guidance on Opportunity Zone Property: In addition to the regulations, the Treasury Department and the IRS issued Revenue Ruling 2018-29, providing rules and examples for property to meet the requirement for original use within an opportunity zone. The revenue ruling provides that land is not included in determining whether property qualifies as original use or substantially improved.
OECD and IGF Publish Practice Notes on BEPS Risks in Mining: The OECD and the Intergovernmental Forum (IGF) released three final practice notes relating to base erosion and profits shifting (BEPS) risks in mining. The practice notes are intended to address some of the challenges developing countries face in raising revenue from their mining sectors.
OIRA Completes Review of Final Capitalization Regulations: OIRA completed its review of final regulations under section 263A. The regulations affect taxpayers that are producers or resellers of property that are required to capitalize certain costs to the property and that allocate costs under the simplified production method or the simplified resale method. The corresponding notice of proposed rulemaking was issued in 2012.