If my actual gain takes place in 2019, do I have to wait until 2020 to invest the gain or can I invest into an OZ fund in 2019, right after I realize the gain?
The general rule is that you must invest within 180 days from the date of sale. The rules, however, may vary depending the source of the gain. The date of sale is generally the date the asset(s) are sold. If though the gain is realized from the sale of trade or business property, or is allocated to you from a pass-through entity, then that date is dependent on the end of the tax year of the taxpayer.
You can do it right afterwards. There is a question with 1231 gains, but I think that will get fixed in next round of guidance.
You have to invest within 180 days of realizing the gain. This period includes the day you realized the gain. Special rules for flow-through entities and 1231 gains.
The 180-day window generally starts from the date of the sale. More flexibility for partners and S corporation shareholder. Special rules apply to the sale of 1231 assets. The 180-day window does not start until the end of the year.
It will depend on the type of gain that is being realized. You must wait until the end of the year to invest a 1231 gain. Other capital gains can be invested once realized.
You must invest within 180 days of the recognition of the gain. There is no waiting period.
It depends. If the gain is in a partnership, then the IRS says your 180 days begins Jan. 1, 2020. If the gain is individual the clock starts on the day you close the sale.
You can invest in a Qualified Opportunity Fund right away. No need to wait if you have an investment ready to go. Note that the clock on the Qualified Opportunity Fund's testing date will begin when you make the investment. So, make sure that you are ready to move forward if you are giving up most of your 180-day period.
The answer depends on the type of gain. If it is Sec. 1231 gain (i.e., gain from the sale of business property), you must wait until 2020 since there is a netting rule with Sec. 1231 gains and losses that requires waiting until the end of the tax year to net these before the 180-day reinvestment period begins. If it is straight capital gain from non-1231 property (e.g., sale of corporate stock), the investment not only can be made in the same year, but must be made within 180 days (not six months, but actually count 180 days) from the date of the sale. This could be as early as the day after your sale.
The second it’s realized and have proceeds, you can roll it over to an opportunity fund and you’re better off in 2019.
A lot of confusion has been created by the IRS's rules for "Section 1231 gains," that is, gains from the sale or property used in a trade or business. The start date for those gains is different from the start date for most "capital gains". In brief: If you have gains from the sale of stock or other assets not used in a trade or business (I’ll call these "portfolio gains") then the start date is the date of sale. If you have gains from the sale or trade or business assets (e.g., a residential building that you own and rent out, or your company's corporate headquarters; I'll call these "Section 1231 gains") then the start date is Dec. 31 of the year of the sale. In the case of Section 1231 gains, you have to wait till Dec. 31 to see how much of these kinds of gains (and losses) you have, and you can only get favorable OZ treatment for the net gain, if any. For example, if you have a $5 million gain from the sale of a building you rent out in March 2019 and a $3 million loss from the sale of another rental property in October, 2019, then on Dec. 31, 2019, you will compute that you have a net Section 1231 gain of $2 million, which is the amount that is eligible for the favorable OZ treatment. Note that Dec. 31, 2019, is the last possible date to qualify for the full 15% reduction in gain under the code provision, and it is also the first possible date to qualify for OZ investing in the case of Section 1231 gains. So, that singe day may be a big deal for people who have Section 1231 gains. The IRS has grandfathered people who made their investments of Section 1231 gains immediately following the investment in 2018, provided they didn't exceed the net amount of the gain as finally computed on Dec. 31. The IRS didn't say what happens if the investment did exceed the net Section 1231 gain. Presumably, the excess is just like any other investment in excess of gain. A lot of people have complained to the IRS about the Section 1231 rule, both because of the delay until Dec. 31 and also because of the netting rule (as opposed to using the gross amount of the gain, and ignoring any Section 1231 losses). So, there is always a chance that the IRS will change its rule on account of one or both of these two issues.
Depends on the specific type of gain. Need more details to answer the question.
There is no waiting period. You can invest eligible gains right away in a Qualified Opportunity Fund. You have up to 180 days to make the investment of the gain, but you don’t have to wait.
If the gain is a pure capital gain, the 180-day investment period begins on the date of the transaction. If the gain is a capital gain from a flow-through entity, the 180-day period can start on either the date of the transaction or the last day of the taxable year. If the gain is a 1231 gain, the second round of proposed regulations require that you first net all 1231 gains and may only begin your 180-day reinvestment period on the last day of the taxable year.
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