How can members in a partnership apply different trigger dates for an OZ’s 180-day investment window for the same gain if that gain is divided?
If the partners rather than the partnership are making the election to defer their gain, each partner can choose to use a separate "trigger" date that works best for their facts and circumstances. If the partnership is deferring the gain, this same flexibility is not permitted.
Each partnership member can choose to reinvest their share of partnership capital gains in a Qualified Opportunity Fund within 180 days of either the date of the sale of the asset that generated the gain; the end of the partnership tax year in which the gain was realized; or the partnership's tax filing deadline (without extension). Those options are afforded to each partner, so long as the partnership itself isn't making an OZ investment with those same gains, without any requirement that partners choose the same start date for their deferral window.
The final OZ regulations allow each partner to make his, her, or its own election to start the 180-day period that is appropriate for them. In fact, there is a specific example of different partners with different start dates.
There are no different trigger dates to partners in a partnership for the 180-day window. All partners will begin their 180-day count on the original due date of the partnership tax return. So if there are multiple sales triggering partnership level gain during 2019, and the partnership does not invest at the entity level into an OZF, each individual partner would start counting their 180-days on March 15, 2020, assuming the partnership is a calendar year end.
Partners in a partnership now generally have three options regarding when to start the 180-day timer: the date of the partnership's recognition of capital gain; the last day of the taxable year; or the due date of the entity's tax return (not counting extensions). No two partners need to pick the same timer. One partner can pick two different timers for two different gains, or split the same gain into two timers.
If the partnership does not elect, each partner can decide to elect or not.
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