As discussed in an earlier TCJA Update, TCJA created qualified opportunity (QO) zones, which are certain low-income communities. Investing in QO zones can result in two major tax breaks for taxpayers — (1) temporary deferral of taxable gain from the sale of other property and (2) permanent exclusion of post- acquisition capital gains on the disposition of investments in QO zones that are held for 10 years. States had a March 21 deadline to nominate QO zones or request a 30-day extension to submit nominations. In a recent press release, the IRS announced the designation of QO zones in 18 states. Submissions were approved for American Samoa, Arizona, California, Colorado, Georgia, Idaho, Kentucky, Michigan, Mississippi, Nebraska, New Jersey, Oklahoma, Puerto Rico, South Carolina, South Dakota, Vermont, Virgin Islands, and Wisconsin. The IRS will make future designations as submissions by states that requested an extension are received and certified. The IRS also plans to issue additional information on QO zones in the future. The press release, which contains a link to the initial designated QO zones in those 18 states, is available here.
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