ANNA FALKENSTEIN: Oh, I see it's the top of the hour. For those of you just joining, welcome to today's webinar, Tax Cuts and Jobs Act (TCJA) Update: Opportunity Zones. We're glad that you're joining us today. My name is Anna Falkenstein, and I am a Senior Stakeholder Liaison with the Internal Revenue Service, and I'll be your moderator for today's webinar, which is slated for 75 minutes. Before we begin, if there is anyone in the audience that is with the media, please send an e-mail to the address on this slide. Be sure to include your contact information and the news publication that you're with. Our media relations and Stakeholder Liaison staff will assist you and answer any questions that you may have. As a reminder, this webinar will be recorded and posted to the IRS Video Portal in a few weeks. This portal is located at www.irsvideos.gov. Please note that continuing education credits or certificates of completion are not offered if you view an archived version of our webinars on the IRS Video Portal. Now, we hope you won't experience any technology issues, but if you do, this slide shows some helpful tips and reminders. We've also posted a technical help document that you can download from the material section on the left side of your screen. It provides the minimum system requirements for viewing the webinar, along with some best practices and quick solutions. If you've completed and passed your system check and you're still having problems, then I encourage you to try one of the following. The first option is close the screen where you're viewing the webinar and re-launch it. The second option is to click on the setting on your browser viewing screen and select HLS. You should have received several documents in a reminder e-mail. These include a PDF copy of today's presentation, an Opportunity Zone facts sheet, Form 8949, and Form 8997. If not, no worries, you can download it or them, actually, by clicking on the materials drop-down arrow on the left side of your screen, as shown on this slide. Closed captioning is available for today's presentation. If you're having trouble hearing the audio through your computer speakers, please click on closed captioning drop-down arrow located on the left side of your screen. This feature will be available throughout the webinar. During the presentation, we'll take a few breaks to share knowledge-based questions with you. At those times, a polling style feature will pop-up on your screen with a question and multiple-choice answer. Select the response that you believe is correct by clicking on the radio button next to your selections, and then clicking Submit. Some people may not be getting the polling question, and that may be because you have your pop-up blocker on. So, please take a moment right now to disable your pop-up blocker so that you can answer the questions. If you have a topic, specific question today, please submit it by clicking the Ask Question drop-down arrow to reveal the text box.

Then type your question in the text box and click Send. This is very important. Please do not enter any sensitive or taxpayer specific information. Again, welcome and thank you for joining us for today's webinar. Now, before we move along with the session, let me make sure you're in the right place. Today's webinar is Tax Cuts and Jobs Act (TCJA) Update: Opportunity Zones. And the webinar is scheduled for approximately 75 minutes. Let me introduce today's speakers, Richard Furlong and Philip Yamalis our Senior Stakeholder Liaisons in the Communication and Liaison division. Both work with tax professionals and small business owners in their respective areas, providing outreach and education, and identifying ways the agency can be more responsive to customers' needs. Now, I'm going to turn it over to Rich to begin the presentation. Rich, why don't you get started? RICHARD FURLONG: I certainly will, Anna and thank you very much.

Good day, everyone. So I think it's appropriate to begin with our objectives for today's webinar. During our presentation, we will provide an overview of the Opportunity Zones, and that will include defining, what exactly is a Qualified Opportunity Zone, and we will also define a Qualified Opportunity Fund. We will also discuss the tax benefits available for Qualified Opportunity Fund investors, and that would include the requirements for those investors to receive those particular tax benefits. We'll explain the important proper reporting of investor elections, and then we'll explain the annual investor reporting, and then we'll wrap it up by providing an impact of the latest disaster relief declarations that impact the Qualified Opportunity Zones as a result of COVID-19. But I think it's appropriate to begin with some acronyms, because we will be using some of these acronyms, pretty much, all of them, throughout today's presentation. So, first acronym you see there is QOF. You'll hear us pronounce at times QOF, and that is an acronym for Qualified Opportunity Fund. QOZ is Qualified Opportunity Zone, QOZB is Qualified Opportunity Zone Business, QOZBP is Qualified Opportunity Zone Business Property, QOZ Property stands for Qualified Opportunity Zone Property, and then, finally, we have TCJA which is an acronym, which many of you are familiar, Tax Cuts and Jobs Act. So, Philip, let me turn it over to you. PHILIP YAMALIS: Thank you, Rich. You just helped me add to my long list of acronyms at the Internal Revenue Service. I hope everyone is doing well. Good afternoon. Just a reminder, ladies and gentlemen, Opportunity Zones went into effect on December 22nd, 2017, with the enactment of the Tax Cuts and Jobs Act. The Tax Cut and Jobs Act added to the tax code Section 1400Z-1, which allowed for the designation of eligible communities as zones, as well as, Section 1400Z-2, which provides tax incentives to investors who invest in these Qualified Opportunity Funds. Now, Sections 1400Z-1 and 1400Z-2 are designed to spur economic development and job creation in distressed communities. More specifically, as you will understand as we progress in this presentation, investors invest in Qualified Opportunity Funds, which then use that investment to invest in Qualified Opportunity Funds, invest in a Qualified Opportunity Zone Property. So again, Opportunity Zones are an economic development tool designed to encourage long-term investment and boast job creation in select distressed rural and urban communities. Taxpayers are encouraged to invest by receiving federal tax benefits when they invest the amount of eligible gains in the equity in Qualified Opportunity Fund.

Investors must invest in a Qualified Opportunity Fund to obtain the tax benefits provided in this provision of the law. So investors with eligible gains who timely invest in Qualified Opportunity Funds may elect to temporarily defer paying tax on those gains until the earlier of December 31st, 2026, or when they dispose of their invest in the Qualified Opportunity Fund.

Listen, we'll go into this into greater detail later in this presentation, but, right now, let me turn it back over to Rich who's going to give us an overview of how taxpayers invest in an Opportunity Zone. FURLONG: Well, thank you, Phil. So following up on the points that Philip just made, I think this diagram bears close evaluation by all of the attendees today. Because it really summarizes the three steps of how taxpayers invest in, ultimately, the Opportunity Zone.

So first at the top left there, upon making a valid election on the Form 8949, and that's the IRS form to report sale and other dispositions of capital assets. So if the investor makes a valid election on the Form 8949 to defer eligible gain from their taxable income, then that investor may defer the inclusion of that gain in gross income if, and only if the investor invests the amount in equity in a Qualified Opportunity Fund, which is the piggy bank you see there in the middle. And then, if the investor holds the qualifying investment in the Qualified Opportunity Fund or QOF for a certain period of time, that investor may potentially exclude up to 15 percent of the deferred gain from tax, and then the Qualified Opportunity Fund will then invest in Qualified Opportunity Zone Property, which you see in the lower right-hand side of the screen. Now, in today's session because of limited time, we are not going to go into too much detail about the Qualified Opportunity Zone Property and the Qualified Opportunity Funds. But as long as the investment is made by the investor timely and into a certified Qualified Opportunity Fund, then the investor will be eligible for a possible reduction in tax on those invested gains.

So, Anna, let me stop here and I think we're ready to tee up our first polling question.

FALKENSTEIN: I believe we are. Audience, our first polling question is a true or false statement. Investors can invest the amount of eligible gain directly into the Qualified Opportunity Zone and receive Opportunity Zone tax benefits. Is this a true or false statement?

So take a moment, look at the question, and then click on the radio button that best answers the statement. A, is it true, or B, is it false? I'll give you just a few more seconds to make your selection. OK. Hopefully, we got that done. We're going to stop the polling now, and let's share the correct answer on the next slide. And the correct response is, B, to receive tax benefits, the investors must timely invest the amount of eligible gain into a certified Qualified Opportunity Fund in order to receive the tax benefit. And now, let's see how many of you got back correct. Oh, 70 percent. So, I think, just real quick, Rich, you want to just kind of touch on what they might not have caught in that question? FURLONG: Sure. Sure, Anna.

So, remember the prior graph, and this is really a two-step process where the investor invests eligible gains, which we'll define later, in a certain timeframe which we'll get into, into a Qualified Opportunity Fund or QOF, which receives those funds. And then, it's the funds responsibility to deploy those investments appropriately into the Opportunity Zones themselves.

So the investors cannot make a direct investment into, without going through, or investing, I should say, in the eligible gains in the Qualified Opportunity Fund. But think of it as that two-step process, you invest the eligible gains into the funds, and then the funds managing that money, invested appropriately, to create job growth and economic development in the Qualified Opportunity Zones. So, with that, let's turn to the Qualified Opportunity Zones on the next slide, and really, drill down a bit and discuss those. So in general, the Qualified Opportunity Zones are specially selected low-income communities where new investments, under the certain conditions, may be eligible for preferential tax treatment. Now, there were population census tracts that could be eligible for designation as QOZs, or Qualified Opportunity Zones, if they met certain requirements. First, they would have to be qualified as a low-income community, and for that, we look to the Internal Revenue Code for low-income community definition and the code provision is 45D(e). Or, you might have a census tract that was adjacent to a designated low-income community, QOZ, and the median family income of that adjacent track, tract, excuse me, did not exceed 125 percent of the median family income of the adjacent designated to QOZ tract.

So how are these tracts designated? Well, it was starting with the governors or chief executives of each state, district or territory, they nominated the tracts, and then the Secretary of Treasury certified each nomination. Now, the governors and chief executives could only nominate up to 25 percent of their low-income communities in their state or territory to be Qualified Opportunity Zones. However, if the number of low-income communities in a particular state is less than 100, then a total of 25 such tracts in that particular state may be designated as Qualified Opportunity Zones once they were certified by the treasury secretary. And furthermore, not more than 5 percent of the total, of the 25 percent total nominated tracts could be adjacent tracts to a Qualified Opportunity Zone. So let me summarize that. The low-income communities were identified and then nominated by each governor or chief executive, and then, subsequently, the nominated low-income communities were designated as Qualified Opportunity Zones. So, you want to note that, by statute, effective December 22nd, 2017, all of Puerto Rico's low-income communities were deemed designated as Qualified Opportunity Zones. So how many zones are we talking about, and you'll see that come up on this screen. There are a total of 8,764 designated Qualified Opportunity Zones. Now, the list of the first 8,762 QOZs, that can be found in IRS Notice 2018-48 which was published a little over two years ago in July of 2018 and is available on 8ing9sdz IRS.gov. IRS Notice 2018-48 was then amended by a subsequent notice 2019-42, and that was published in July of 2019. Now, Notice 2019-42 added two additional Qualified Opportunity Zones, both of which are located in Puerto Rico. Again, so that brings us to the total or the fixed number currently of 8,764 designated Qualified Opportunity Zones. And as you can see on the slide, these QOZs have been designated in all 50 states, including Hawaii, Alaska, also, the District of Columbia, and five United States territories. So in summary, a Qualified Opportunity Zone is an eligible census tract that was designated and then certified as a Qualified Opportunity Zone. So with that, Philip, I'm going to turn it over to you to begin the discussion of the Qualified Opportunity Funds. YAMALIS: Hey, Rich, thank you so much. Great. So what is a Qualified Opportunity Fund then? A Qualified Opportunity Fund is defined as an entity that both qualifies and self-certifies as a Qualified Opportunity Fund. First, we're going to talk about what qualifies as a Qualified Opportunity Fund. So as you could see on the slide, to qualify as a Qualified Opportunity Fund, the entity must first be organized as either a partnership or a corporation, that includes an S corporation, this includes LLC, filing as a partnership on Form 1065, or as a corporation on Form 1120 series returns. A sole proprietor on a Form 1040 Schedule C cannot be deemed a Qualified Opportunity Fund. So the entity must be an investment vehicle, which basically means that the entity offers ownership equity to investors, and in exchange, the investors hope to earn a return or profit, right, on their investment. In the case of Opportunity Zones, investors also expect to realize significant tax benefit. Next, the entity must be organized for the purpose of investing in Qualified Opportunity Zone Property. It must hold at least 90 percent of its assets in Qualified Opportunity Zone Property, or the Qualified Opportunity Fund will be subject to a penalty, which is a 90 percent Qualified Opportunity Zone Property ownership, as referred to, as the investment standard. Ninety percent Qualified Opportunity Zone Property ownership, again, is referred to as the investment standard. An entity that does not meet the investment standard, the 90 percent, can still certify as a Qualified Opportunity Fund, but it would be liable for a penalty for failing to maintain this investment standard. Qualified Opportunity Zone Property is either tangible property used by a trade or business in a Qualified Opportunity Zone meeting certain other requirements or stock, or partnership equity interest in a Qualified Opportunity Zone Business, meeting certain requirements. Finally, the investment by the Qualified Opportunity Fund cannot be into another Qualified Opportunity Fund. So we have an entity that qualifies as a Qualified Opportunity Fund, then how does the entity certify as a Qualified Opportunity Fund? So let's look at certification. To certify as a, as a Qualified Opportunity Fund, the entity must, that meets the qualifications listed on the prior slide, then self-certify by completing Form 8996, which is the Qualified Opportunity Fund, and submitting it with their corporate or partnership federal tax return to the Internal Revenue Service. The return with the attached Form 8996 must be filed timely, of course, taking extensions into account. Now, the Form 8996 must be filed annually by a Qualified Opportunity Fund, to either certify its compliance with the investment standard, or to compute the penalty due to its failure to meet the 90 percent investment standard. So, in summary, ladies and gentlemen, the most important points for Qualified Opportunity Funds is that they file as a partnership or a corporation, hold at least 90 percent of its assets in Qualified Opportunity Zone Property, and then self-certify each year using Form 8996, which includes reporting all of their Qualified Opportunity Zone Property. Remember, if the Qualified Opportunity Fund fails to hold at least 90 percent of its assets in Qualified Opportunity Zone Property, it may be subject to a penalty.

So with all that, Anna, how about another polling question? FALKENSTEIN: Sounds good to me.

So here's our second polling question. Which of the following is not eligible to self-certify as a Qualified Opportunity Fund? I hope you were listening to Philip. The potential answers, A, corporation filing a Form 1120, B, a limited partnership filing Form 1065, C, a trust filing on Form 1041, or D, a single member LLC filing a Form 1120-S. All right take a moment. Click on the radio button that best answers that question. I'll give you just a few more seconds to make your selection. OK, I hope you made your selection. We're going to go ahead and stop the polling now, and let's go ahead and share the correct answer on the next slide. And the correct response is, C, a trust filing a Form 1041, remember to qualify as a QOF an entity files as a partnership or a corporation on federal income tax return. And let's check and see if our respondents were a little better. Well, a little bit. I know all of these qualified opportunity wordings and acronyms may be confusing you. We got a response of 73 percent on this one. Phil, you want to just touch on that just for a second? YAMALIS: Sure. You know, Anna, I really didn't say that a trust filing on Form 1041 was eligible. I didn't specifically say that. I know I did say that a sole proprietor on a Form 1040 Schedule C cannot be a Qualified Opportunity Fund. But I know I did stress and I want to stress it again, the entity has to be organized as either, a partnership, 1065 series, or a corporation, 1120 series, corporation or partnership.

That's it. The entity has to be organized as one of those in order to qualify as a Qualified Opportunity Fund. FALKENSTEIN: Thank you very much. Rich … YAMALIS: You're welcome.

FALKENSTEIN: … we're going to turn it back over to you. FURLONG: Thank you, Anna, and thank you, Philip. So now let's turn to discussing investors in these Qualified Opportunity Funds or QOFs as we're referring to them. But before we do, I think it's appropriate that I mention, our presentation today is focused on the federal tax implications and reporting, with respect to the investments in a Qualified Opportunity Fund. And the Internal Revenue Service does not endorse any particular Qualified Opportunity Fund. Investors should consider these investments in QOFs as they would any other investment. In addition, and this is a very important takeaway today, investors need to maintain records to support their investments in the Qualified Opportunity Funds, and that would be similar to any other investments that they may have outside the funds.

Now, we'll discuss what Qualified Opportunity Zones mean to the investors, and that will include, obviously, their benefits to those investors, and also the computation of those benefits. That will include, what is an eligible gain, that's a specific term eligible gain, and what we mean by the 180-day investment period. We will also discuss how investors report their deferral on the Form 8949, again, that's the form to report sales and other dispositions of capital assets, and how, beginning with tax year 2019 returns, these investors must also annually report their investment holdings in the Qualified Opportunity Funds, and that would include any acquisitions and any dispositions from the funds on a brand new Form, Form 8997 and you see it referenced there. That's entitled Initial and Annual Statement of Qualified Opportunity Fund Investments.

I think Anna mentioned at the outset we may have that as a resource for those attending today.

You can also find it on IRS.gov, because that Form 8997 is used to maintain the investment as a Qualified Opportunity Zone investment by that investor. So, Philip, let me toss the baton to you. YAMALIS: OK, Rich, thanks, let me try to catch it. All right. You're absolutely right.

So before we discuss the investor benefits, Rich, let's discuss what is an eligible gain for purposes of Opportunity Zones just a little bit clear. So as a refresher in tax law, right, a gain is the amount of money you receive, plus the fair market value of any property from a sell or exchange of property that is more than the adjusted basis of the sold or exchanged property.

I took that out, right out of the refresher course for understanding a gain. So eligible gains include both capital gains, as well as, qualified 1231 gain, but only gains that would be recognized for federal income tax purposes and that are not from a transaction with the related person or entity. A Section 1231 gain is a Section 1231 gain recognized on the sell or exchange of property defined in, of course, Section 1231B of the Internal Revenue Code, to the extent that it exceeds any amount with respect to that 1231B property that is treated as ordinary income under Sections 1245 or 1250 of the code. To obtain, to obtain this deferral, the amount of the eligible gain must be timely invested in a Qualified Opportunity Fund in exchange for an equity interest in the Qualified Opportunity Fund. This would be known as a qualifying investment. So once you've done this, you can claim the deferral on your federal tax return for the taxable year that the gain would be recognized, if it was not deferred. For example, you sold some stock in 2019 for a capital gain, right, and during the 180-day, six-month 180-day period, beginning on the date of the sale, you invested the amount of the gain in a Qualified Opportunity Fund.

Could you, can you defer paying the tax on that gain? Absolutely. This gain is considered an eligible gain. So, Anna, with that, let's take it to another polling question. FALKENSTEIN: OK, we have our third polling question here. By this time, audience, you know how this works.

I ask the question, give you the option. Let's hope that you get this one. What is the last tax year and election to defer eligible gains realized can be made? This was briefly mentioned earlier on. Hopefully, you were listening. The options are, A, 2023, B, 2026, C, 2027, or D, 2028. So take a moment and think about it, click on the radio button that best answers the question. I'll give you just a few more seconds to make your selection. OK, we're going to go ahead and stop the polling now and go to the next slide. And the correct response is, B, 2026.

As you can see, we have, let's go ahead and see what the percentage is here. Uh-oh. I think, I think you may have missed this earlier on, it was mentioned, but it looks like 58 percent of you caught it. Philip, can you clarify why 2026 is the correct answer? YAMALIS: Anna, I will, but I'm still getting over and I'm chuckling over your, uh-oh. But that's OK. Sure, here it is.

Audience, really, the last year is the tax year containing December 31st, 2026. Remember, eligible gains realized on or prior to December 31st, 2026 may be elected to be deferred. Please know that although the gain is realized in tax year 2026, it is indeed possible that the investment into the Qualified Opportunity Fund might not occur until 2027, OK? FALKENSTEIN: Thanks, Phil. YAMALIS: You got it. FALKENSTEIN: All right, Rich, it looks like you're up next. FURLONG: Yes, thank you, Anna. So let's get to the heart of the matter for the investors and talk about these benefits for investing in Qualified Opportunity Funds. So the first benefit to the investors is the ability to temporarily defer the tax on the eligible gain by making the investment in, timely investment in a Qualified Opportunity Fund. But remember, this is a temporary deferral and it is only for eligible gains. So to obtain this deferral, the amount of the eligible gain must be timely invested in a Qualified Opportunity Fund in exchange for an equity interest in the Qualified Opportunity Fund. So this is what we refer to as a qualifying investment into the QOF. Now, once the investor has done this, the investor then can claim the deferral on the investors' income tax return for the taxable year the gain would normally be recognized, if it were not deferred. It's important to remember that, in general, the taxpayers have 180 days to invest in eligible gain in a Qualified Opportunity Fund. The first day of the 180-day period is the date the gain would be recognized for federal income tax purposes, if the gain was not elected to be deferred by the investor. However, there are some exceptions that I want to make you aware of. jshtiondz Most notably, eligible gains might be reported to a taxpayer on a Schedule K-1. A Schedule K-1 is issued by, what we refer to as a flow-through entity, which could include a partnership, an S corporation, or a Trust, any of which could have eligible gains that they would report on a Schedule K-1 to their partners, shareholders or beneficiaries. So at the option of the taxpayer who's receiving the K-1, the start of the 180-day investment period to invest those eligible gains into a QOF may begin on any one of three following dates. It could be the last day of the flow-through entity's taxable year, it could be the same date the flow-through entity realized the actual eligible gain at the entity level, or the due date for the flow-through entity's tax return without extensions for the tax, taxable year in which the entity realized the gain. So let me give you an example that may clarify that. We have a calendar year partnership that realized the gain on June 1st of 2019.

They sold some stock, which they, the partnership, were holding as an investment. Now, a partner in the partnership who received the K-1 showing their share of that gain, that resulted in capital gain, that partner can elect at his or her choosing to use either the June 1st date, the June 1st, 2019 to begin the 180 days, that was the date the partnership realized the gain, or they could use the end of the partnership's tax year, which is December 31st, 2019, to begin the 180 days, or they could use March 15th, 2020, which is the due date of the partnership calendar year tax return as the beginning of the 180-day investment period. So the K-1 recipient in this case has certain options available to them. However, and this is a very important however in the third bullet there, this temporary deferral ends the earlier of the date on which the investment in the Qualified Opportunity Fund is disposed or transferred or exchanged, either in whole or in part, or no later than December 31st, 2026. So that's why it's a temporary deferral. So in other words, if the taxpayer reduced their interest, their equity interest in the Qualified Opportunity Fund in whole or in part before December 31st, 2026, that investor has, what we refer to, as an inclusion event, and we'll come back to that term later, inclusion event, and an inclusion event could include gifts or other transfers, let's say, pursuant to a divorce decree.

Now, before I finished this slide, I also want to note that when a taxpayer elects to defer an eligible gain and then invest in a Qualified Opportunity Fund, their tax basis in the Qualified Opportunity Fund investment is zero. So again, going on to the next slide, when the taxpayer makes an election to defer an eligible gain timely made as an equity interest investment into the QOF, the incoming tax basis in the QOF for that investor is zero. But, here's one of the benefits for investors, if, before the deferral ends, the QOF investment is held for at least five years, then the tax basis for that investor in the Qualified Opportunity Fund is automatically increased by 10 percent of the amount of the deferred gain. So that could mean if they held it for five years, they would never pay tax on 10 percent of the deferred gain. And then, additionally, certain requirements are met if the Qualified Opportunity Fund investment is held for at least seven years before the deferral ends. And remember, the deferral ends no later than December 31st, 2026 under current statute, then the tax basis in the Qualified Opportunity Fund automatically increases by another 5 percent of the amount of deferred gain.

So why is this concept of Qualified Opportunity Fund tax basis so important? So let me pause for a moment and talk about QOF basis. Now, we just discussed that when we have an eligible gain, and Phil discussed eligible gains, and then we invest timely into a Qualified Opportunity Fund, the initial tax basis in the Qualified Opportunity Fund is zero. Then, we talked about holding on to the Qualified Opportunity Fund investment for a period of time, five or seven years, and that allows the basis in the Qualified Opportunity Fund to that investor to automatically increase by a percentage of the original deferred gain. This is a very important concept, because, when that deferral of the gain ends, then we're going to need to know the tax basis of the Qualified Opportunity Fund investment to calculate the gain or loss. So let me explain with the next slide. So when the deferral of the gain ends, either due to an inclusion event, or no later than December 31st of 2026, whichever is earlier, either the inclusion event or that date of December 31st, 2026, we'll have to do a computation that must be done to determine how much exactly of the deferred gain will be reportable in that tax year. Now, the actual computation of the amount of the deferred gain to be included in the income is a bit tricky, but we have a little chart here, a formula that may help you. The amount of the gain to be reported as income at the end of the deferral period is the lesser of the amount of the deferred gain, or the fair market value of the Qualified Opportunity Fund investment minus the basis of the Qualified Opportunity Fund investment. And again, remember, important takeaway today, the basis of the Qualified Opportunity Fund investment at the beginning is zero, if you elect the deferral, and then you can get those, we'll call it as, step-up in basis of 10 percent if you hold it for five years, and, or, and/or another 5 percent if you hold it for a full seven years, as long as you do that before December 31st of 2026, and the basis could also be adjusted by any allowable increases and decreases while your money is being put to work within the Qualified Opportunity Fund. Now, please note, again, that the Qualified Opportunity Fund basis to the investor can be increased by the amount of the deferred gain that will be reported in income in the tax year in which you're required to report that deferred gain. But here we come back to the record keeping requirement which is very important. Investors in Qualified Opportunity Funds must maintain records to support their investments, and again, that is no different than any other investments that they may have in their portfolio. But this would include keeping track of the specific investments in the Qualified Opportunity Fund and keeping track of their tax basis in those investments. So now, we're going to turn to another benefit, a very big benefit if the investor has held their investment in a Qualified Opportunity Fund for 10 years, and for that, I'm going to turn it back to you, Philip. YAMALIS: Thanks, Richard. Give you a chance to catch up with a drink of water. Thank you. As previously said, and as Rich mentioned, the Qualified Opportunity Fund basis is increased by the amount of the deferral gain reported in income, right?

So when the deferral ended and the investor reported the gain and income, the basis in the Qualified Opportunity Fund increased by the amount reported. Now, here's where it gets nice.

That's my best word, nice. If the investor holds an investment in a Qualified Opportunity Fund for at least 10 years that originated with deferral of a qualifying gain, the investor is eligible to elect an increase in their basis in the Qualified Opportunity Fund investment, to its fair market value on the date that the Qualified Opportunity Fund investment is sold or exchanged. Note, however, that if the Qualified Opportunity Fund is a partnership or an S corporation, after the investor has held the Qualified Opportunity Fund interest for at least 10 years, the investor can elect to exclude gains from the sale of Qualified Opportunity Fund asset. Including assets held at the Qualified Opportunity Zone Business level, except for gains from the sale of inventory in the ordinary course of business. You heard that correctly, ladies and gentlemen. The Qualified Opportunity Fund basis for Qualified Opportunity Fund investment that originated from a timely invested amount of eligible gain and held for 10 years before disposition is nice, because it may elect to change the basis to the fair market value on the date of disposition. So in summary, when the taxpayer invests the amount of an eligible gain within the 180-day period, at their election, they receive a tax deferral on the eligible gain.

They can receive a partial exclusion from income of that deferred gain based on the length of time the amount of the gain remains invested in the Qualified Opportunity Fund. In addition, they can increase their basis to fair market value in the Qualified Opportunity Fund investment if they hold the investment in the QOF for a period of at least 10 years. That's important to note that when the investment in a QOF is part of a gain deferral election, the investment date is used as the reference date in calculating the holding period for purposes of the basis step-ups and the nice 10-year basis election. So with that, Rich, let me turn it over to you, so that we can talk about the reporting of this deferral of an eligible gain. FURLONG: Thank you, Philip. So, yes, let's get into the reporting, and you can see here that you have a snapshot of a portion of the Form 8949. We're going to show you how the investor reports the election to defer an eligible gain, and they do it on the Form 8949 as you can see. However, you should remember that not all capital gains and losses are reported on Form 8949, but all capital gains and losses do flow-through to Schedule D. So now we're going to focus on the deferral election.

Each eligible deferral election is reported on its own separate row on the Form 8949. It would either be in part one with box C checked, and that, of course, is for short-term transactions that are not reported on Form 1099-B, or in part two with box F checked, which is long-term transactions not reported on Form 1099-B, depending on whether the gain is, that is being deferred by the investor is short-term or long-term. Now, if the realized gain were reported on a Form 1099-B, then the realized gain reporting would not be on the same Form 8949 as the eligible gain deferral election, it would be on another Form 8949. And when you look at the bottom half of this slide, you can actually see portions of part one and part two of the Form 8949, and this is the form for 2019, and you can see these box C and box F checked, respectively. You can see the little checkmark there. In part one with box C checked, the text there has an election to defer eligible short-term gains by investing in a QOF, and then, in part two, with box F checked, the taxpayer has an election to defer eligible long-term gains by investing in a QOF. Now, what if the investor made multiple investments into different QOFs, or if they made investments into the same QOF but in different days, then a separate row must be completed for each deferral election. So let's go through one row. In column A there, the taxpayer should have entered only the EIN or Employer Identification Number of the Qualified Opportunity Fund into which, into which they invested. So we need the EIN in column A. Column B, they're going to enter the date they invested in the QOF, keep column C, D, and E blank for your election deferral. And then you can see a new code Z, relatively new code Z in column F.

That's where you're showing that this, you're electing to defer an eligible gain into a Qualified Opportunity Fund. And then, to show that in terms of numbers, you enter the amount of the deferred gain, but as a negative number, so you put it in parentheses in column G. And then, column H would be the same amount as a positive as column G. So they, when you do, or your software or you do the calculation, it will, it will wash out the negative and the positive. The election to defer eligible gain is reported on the same tax return in which the eligible gain itself is reported. Now, please note, take a look at the second deferral that's shown there and you see a date there in column B of June 5th, 2020. So think about what this means. The taxpayer realized the eligible gain in 2019, this is a 2019 Form 8949, and then the investor, she reported it elsewhere on her Schedule D or Form 8949 with a different checkbox marked, and the deferral for the eligible gain, and this is the very important point, was invested within that 180 days into a Qualified Opportunity Fund and it was invested actually on June 5th of 2020.

So that was no more than, it was less than 180 days after the gain was actually realized in 2019. So it's very important to remember that the taxpayer only has a valid deferral election if they show that they, first, have an eligible gain to defer, secondly, that they invested within 180 days of realizing that eligible gain, and finally, number three, they invested in a Qualified Opportunity Fund, and they show that by listing the EIN of the QOF in which they invested there in column A. Now, if the taxpayer does not have a valid deferral, then that taxpayer does not have a qualifying investment, and that taxpayer does not qualify for the qualified, excuse me, for the Opportunity Zone investor benefits that Philip and I discussed previously. You should also note that qualifying 1231 gains that are being deferred, they are also reported in part two of Form 8949. Now, a qualified 1231 gain being deferred, that must be labeled as such, and you label it with , by writing in QOF investment from Form 4797. And it would refer you back for specifics to the instructions for the Form 4797 or you report 1231 transactions and the form 8949 for details on reporting the deferrals of those qualifying 1231 gains. So Philip, let me turn it back over to you to continue. YAMALIS: OK, Rich. Thank you.

So the bottom line is, how does the taxpayer report the end of the deferral? So taxpayers will report the end of the temporary deferral as we mentioned on Form 8949, now if the disposition of the Qualified Opportunity Fund investment is reported on a Form 1099-B as in boy, then the Qualified Opportunity Fund disposition would not be on the same Form 8949 as the reporting of the end of the gain deferral. This is expected because QOFs should be reporting to the investors their dispositions on Form 1099-B, and because any gain on the disposition of the investment in the QOF is different from the deferred gain must be included as a result of the disposition.

Also, remember, the deferred gain retains its original character. If the original deferred gain was short-term, then it would be reported in part one with box B checked, or if it's long-term, again, it will be reported in part two with box F checked. So as you can see, this taxpayer on this particular slide reported the disposal of their 20 percent interest in a QOF partnership, and again, in the year 2019 Form 8949. Since the end of the deferral is also reported in part two, this means that the original deferral has a character of a long-term. If it was short-term, it would have been reported separately in part one of Form 8949. So taxpayers report the end of the deferral on its own row by entering the following information as we see on the slide. Column A, they should have entered only the EIN of the QOF into which they invested.

Column B, they enter the date invested in the QOF. Column C, they enter the date of the deferral ended. Columns D and E, of course, are left blank. And then, they enter code Y in column F, and they should have entered the amount of the deferred gain being included in taxable income as a positive number in column G. In column H, that will be the same as it was, as is what is in column G. Remember, the amount in column G needs to be calculated as Rich indicated earlier. The amount of the deferred gain to be reported as income at the end of the deferral period is the lesser of the amount of the deferred gain or fair market value of the Qualified Opportunity Fund investment, minus the basis in the QOF investment. The basis in the QOF investment is zero, plus any of those applicable five or seven-year basis adjustment, as previously mentioned by Rich, and all the allowable increases and decreases. Also, remember, that for purposes of determining gain on the disposition of the QOF investment, QOF basis is increased by the amount of deferred gain reported in income. So, in the example provided here, the taxpayer previously elected to defer $500,000 for a 20 percent equity interest in a QOF partnership. The taxpayer held the interest just over one year and then sold this interest for $600,000 which was the fair market value. They did not hold the investment long enough to receive that five or seven-year basis adjustment that Rich indicated earlier. Based on the information provided here there was no other adjustments to the taxpayer's QOF basis. So in this case, the deferral gain required to be reported in the income is the $500,000, which is the lesser of $500,000 or $600,000 minus zero basis. Remember, that after the deferred gain is reported, including after the inclusion on December 31st, 2026, the QOF basis is increased by the amount reported. So, again, in this example, the QOF basis was zero, and now, that the deferral was reported in the amount of $500,000, the basis for the QOF disposition is $500,000, and again, is reported in column E of the form. Again, see the instructions for Form 4797, as well as, Form 8949 for reporting of the inclusion of Section 1231 gain that would be previously deferred. So, Anna, with all this information, can we stop here, perhaps, for our last polling question? FALKENSTEIN: Yes, I think you need to take a breath. So, while you take your breath, I'm going to do our last polling question for the day, and this is a true or false statement. When the elected deferral of a short-term eligible gain ends due to the sale of a QOF investment after it has been held for more than one year, the deferred short-term eligible gain is taxed as a long-term eligible gain. Is this a true or a false statement? OK, I hope you were listening earlier. Take a moment. Click on the radio button that best answers the statement. A is true and B is false. I'll give you just a few more seconds to make your selection. OK, I think we should go ahead and stop the polling now, and let's share the correct answer on the next slide. And the correct response is, B, false. And let's see how many got this right. 53 percent. OK. Richard, can you give us just a little bit on that? FURLONG: I'd be happy to. And I'm not surprised that this was a challenging question. Because, intuitively, you would think that the longer you held the deferred gain that you've invested in the QOF, if that gain originally was short-term at the time you invested it, but you held it long enough within the QOF, it would be long-term. But that is not the case. The deferred gain always retains its original character as either a short-term or long-term, depending on the gain at that time. So remember, you have to conceptually keep the deferred capital gain distinct from the gain that can and you hope will arise from the result of appreciation of your investment in the Qualified Opportunity Fund, because that's what you're looking to do. You're looking to have your money, your investments grow while it's in the QOF. So that was a little tricky question, Anna. But … FALKENSTEIN: Yes, a lot to remember. But thank you for the clarification, Richard. We're going to pass it back to Philip. YAMALIS: OK, Anna. Thank you.

So, now, we have a taxpayer that did not dispose of all of their Qualified Opportunity Fund investments before that magic date of 12/31/2026. The taxpayer is required to report this end of the remaining deferrals. So unless the taxpayer disposed the QOF investments in the same year, there won't be any QOF dispositions being reported, only the end of the deferrals. Again, remember, the deferred gain retains its original character as Rich just clarified. If the original deferred gain was short-term, then it will be reported in part one with box C checked, or if it's long-term, then part two of the form with box F checked. So in this particular example, the original gains deferred were long-term. If any of them were short-term, they would have been reported separately in part one of Form 8949. The taxpayer should report the end of the deferral on its own row, in column A, they would enter only the EIN of the QOF in which they invested, column B, they entered the date that they invested in the QOF, and column C, enter the date that the deferral ended, it should have left, of course, columns D and E blank, and then enter code Y in column F. And then, they should have entered the amount of the deferred gain being included into taxable income as a positive number in column G. Column H will be the same as what's in column G. Remember, that amount in column G and H needs to be calculated, right?

The amount of the gain to be reported as income at the end of the deferral period is the lesser of the amount of the deferred gain on the fair market value of the QOF investment minus the basis in the QOF investment. Again, the basis from the QOF investment is zero, plus the five or seven-year basis adjustment as previously discussed, as well as, all other allowable increases and decreases. Remember, the QOF basis is increased by the amount of deferred gain reported in income. Remember earlier when we said that investors need to maintain accurate records, including tracking of their Qualified Opportunity Fund basis, folks, we can't impress that upon you enough, how important this will be, especially, when preparing 2026 returns. Well, Richard, let me turn it back over to you. FURLONG: Yes. So we'll pick up the pace a bit here, and Philip and I are going to walk you through quickly this new Form 8997, which is part of the reporting requirement, it's the annual reporting requirement for investors in QOF. Now, this form became available beginning in tax year of 2019. It's part, I believe, of the resources provided to you today by our webinar team. The form is filled by any eligible taxpayer holding a qualifying investment in a QOF at any point during the tax year. The Form 8997 must be timely filed with the federal tax return that would include extensions. Now, there are four parts to the form. On the screen, you're looking at part one, were a taxpayer reports the QOF investments that originated from elected deferrals made before the beginning of the year, in this case, before the beginning of 2019. So in column A, they enter only the EIN of the QOF into which they invested. Column B is the date of that investment in the QOF. Column C, they have a description of the QOF investment, you see an example, actually, two examples there. And then, in column D or E, as appropriate, depending upon whether it's a long-term or short-term deferred gain, they enter the dollar amount in either of those two columns for the gain deferred as a result of the QOF investments. If two or more investments were made into the same QOF but on different dates during the year, then you list them separately in the, on the 8997. So when viewing the information provided here in part one, we know that this taxpayer deferred game and they invested in two different QOFs, as you can see there on the screen. So, Philip, let me turn it back to you for part two. YAMALIS: OK. So part two identifies the current tax year eligible gains deferred by investing in a QOF. Each column requires the same type of information as defined on the prior slide that Rich just indicated part one. As I said before, if two or more investments were made into the same QOF but on different dates, they need to be listed separately in separate rows. For each entry is shown on the slide, there should be a corresponding entry with the Z code in column F on its own row of Form 8949 in part one, with either box C checked for short-term, or part two with box F checked for long-term. Rich, take it away. FURLONG: So onto part three, here we have dispositions. This part three reflects QOF investments that were disposed of during the current tax year. And again, the type of information reported is similar to what you saw in parts one and two. Remember, for tax years beginning before December 31st, 2026, a disposition or reduction in ownership interest is what we refer to as an inclusion event. And that means that for each entry, there should be a corresponding entry with code Y in column F on its own row of the Form 8949, in part one with box C checked if it was short-term, or part two with box F check, depending on whether the gain that was deferred, and now, must be reported as short-term or long-term. Also, depending on what triggered the inclusion, it's expected that the disposition then would be reflected ultimately on the Schedule D, or on another form that flows into the Schedule D. Philip, let me turn it to you for part four. YAMALIS: All right, let's wrap it up with part four, the Form 8997. That's where we reflect the investment holdings at yearend that originated from elected gain deferrals.

So reporting in part four is very similar to what's reported in the first three parts of the Form 8997. It should be noted, however, that in tax year 2026 for each entry in part four, there should be a corresponding entry reporting the end of the temporary deferral with a Y code in column F on its own row Form 8949 in part one for short-term with box C checked, or part two with box F checked, of course, depending on whether it's being deferred as short-term or long-term. So, Rich, that kind of wraps up the annual reporting requirements for QOF investors, let me turn it over to you to cover the latest information on Qualified Opportunity Zone Disaster Relief. FURLONG: Well, thank you, Philip. So, on April 9th of this year, IRS posted Notice 2020-23 and that provided broad COVID-19 relief. It also included an extension of the 180-day period for Opportunity Zone investors. And then, subsequently on June 4th of this year, IRS posted Notice 2020-39 and that was a COVID-19 related relief notice. Notice 2020-39 amplified the relief provided in notice 2020-23, and it also provided, in that notice, certain relief to the Qualified Opportunity Funds and the Qualified Opportunity Zone Businesses and the clarified relief provisions provided in the regulations. So here's a short summary of the relief provided in the notice to investors. For investors with a 180-day investment period beginning on or after April 1st of 2020 and ending before December 31st of 2020, these investors have until December 31st, 2020 to make their investment. So, for example, let's say an investor's 180-day period was set to expire on May 1st of this year, then relief granted them, would grant them gives them until December 31st of 2020 to make a qualifying investment in a QOF. Please note that the taxpayers still need to make that valid deferral election in accordance with the instructions on the Form 8949, and also report their investments on the Form 8997 with their timely filed federal tax return, and that could include possibly an amended tax return. Now, because of the time constraints today, I'm going to refer you back to Notice 2020-39 for a relief that was provided, specifically, to the Qualified Opportunity Funds. And finally, there were two relief items related to QOFs and Qualified Opportunity Zone Businesses that were, that had been granted, but they were not triggered by the IRS COVID-19 relief notices. Instead, they were provided in the final regulations and they were triggered by the president's emergency declaration earlier this year. These items of relief are referenced on the slide that you're looking at. And you'll find more specifics on this relief for COVID-19 and the regulation disaster relief, again, in that Notice 2020-39. So, Philip, before we get to the Q&A, I think you have sub-resources you want to highlight for our attendees. YAMALIS: I do, Rich. Thank you. So, this next slide provides a list of key opportunities on resources. I'm not going to read them off to you based on time constraints. All of these resources that you see on the slide can be found at IRS.gov, unless, of course, it's otherwise specified on this slide.

Remember, additional information can be found at the Tax Reform site on the IRS.gov website.

Scroll to Opportunity Zones and click also by entering Opportunity Zones in the search box available at Treasury.gov, as well as the one and only IRS.gov. Again, if, more resources on the next slide as they are listed here. I do want to add one that's not on this last slide, ladies and gentlemen, because, it is hot off the press. The Department of Treasury and the Internal Revenue Service recently released Fact Sheet 2020-13, which is titled, “Opportunity Zones Fact Sheet.” It was issued recently in August of 2020. It's not listed on the slide. But again, it's hot off the press. It's an excellent resource that is available to you and it is available, also, for download from the material section of this presentation. So with that, Anna, let me turn it over to you to lead us on our question and answer session. FALKENSTEIN: OK. And we don't have very much time, so I'm going to try to get through this as quickly as possible and get to as many questions as we can. Again, it's Anna Falkenstein and I'm going to moderate the Q&A session. Before we start the Q&A session, I do want to thank everyone for attending today's presentation, Tax Cuts and Jobs Act Update: Opportunity Zones. Earlier I mentioned that we wanted to know what questions you might have for our presenters, and here is your opportunity.

If you haven't input your questions, there's still a few minutes, go ahead and click down the drop-down arrow and next to the Ask Question field, type in your questions and select Send.

Richard and Philip are staying on, so joining us to answer your questions, as well as, Laura Schmitz. Laura is a Revenue Agent and a Subject Matter Expert in the Small Business Self-Employed Division. Now, one thing before we start, we may not have time to answer all of your questions. However, let me assure you, we will answer as many as time allow. If you're participating to earn a certificate and related continuing education credits, you will qualify for one credit by participating for at least 50 minutes from the official start time of the webinar, which means that first few minutes of my chatting with you before at the top of the hour, that does not count towards the 50-minute. Let's get started, so we can get to as many questions as possible. So I'm going to just jump in real quick first. Laura, can you explain, again, how a corporation or a partnership becomes a certified as a QOF? LAURA SCHMITZ: Hi.

Yes, I can. Can you hear me, Anna? FALKENSTEIN: Yes, I can. SCHMITZ: Thank you. The qualifying partnership or corporation become certified as a QOF by completing and attaching annually to their federal tax return Form 8996. This includes single member LLC, filing as a C corporation or as an S corporation. So the qualifications to be a QOF and an S corporation can also be a QOF, as well as a single member LLC filing an 1120, and also, or on an 1120-S. Back to you, Anna. FALKENSTEIN: OK. And I just got a message and I just wanted to share this with everybody who may have been listening. Obviously we had a lot of information here and I've just been asked if you can stay with us, we are going to go to the bottom of the hour, so that we do have an opportunity to get to your questions. If you have to drop off, we understand, but we hope you can, you know, remain with us and hear some of these great questions. Laura, I've got another one, I was actually looking at this just a few moments ago and said, yes, we do need more information. Since the end of the deferral period is December 31st, 2026, does that mean that an investor who has invested in a QOF, say in 2020, they won't be able to reap the benefits of investing in a QOF for 10 years? Is that, is that the case or how does that work? SCHMITZ: No. What happens is, is that, you know, when you look at the 12/31/2026 date, that original gain that you deferred ends at that point in time. But if you're still holding on to your QOF investments, you haven't, you haven't disposed of or reduced your interest in the QOF investment itself. So, that you're still holding on, so that has a separate holding period. So when you invested in that QOF investment, that continues on and you'll be able to, you know, obtain the 10-year benefit based on the appreciation, you know, the expected or the hope for appreciation in the QOF after you've held the, that QOF investment for 10 years. I'm going to give a quick example. Today, I invested in ABC LLC, it files a partnership return, and today is September 3rd of 2020, and I use an eligible gain and I properly invested timely within 180 days from when I realized that gain, and I continue to hold on to that, all the way through 12/31 of 2026. In fact, I continue to hold on it to ABC LLC the QOF long after that. The only thing that ends on 12/31 of 2026 is the deferral of that gain that I had invested into it. You know, I still own the ABC QOF, so that continues. Does that explain that, Anna? FALKENSTEIN: You know what, that really helped. It did. Because, you know, in my mind, I was thinking, oh, do we have to dispose of everything in 2026? But you're saying, no, we don't. You know, you may have to deal with the deferral part, but you can hold on to the investment and potentially still get that 10-year benefit. So that's great. SCHMITZ: That's correct. Thank you. FALKENSTEIN: OK, awesome. Rich, I'm going to throw one at you real quick. It seems that we've been talking about all of this and we seem to have just barely touched on the whole purpose of the Opportunity Zone program. Can you tell us what that, what it was intended to do? FURLONG: Certainly, Anna, because this is a unique program as enacted by Tax Cuts and Jobs Act. And its purpose, again, it's designed to spur economic development in distressed communities by providing specific tax incentives for the investors who will invest new capital by having these incentives in businesses operating in one or more Qualified Opportunity Zones. So remember that the three benefits that Phil and I discussed today, first, an investor can defer tax on any prior eligible gain to the extent that investor invest the corresponding amount timely into a Qualified Opportunity Fund.

So that's the first benefit, and that deferral lasts until the earlier on which the date the investment is sold or exchanged or December 31st, 2026. And then, as we mentioned earlier, if the investment is held for five years, they will be able to exclude 10 percent of the deferred gain. If they hold it for seven years, the 10 percent exclusion can become 15 percent. And then, secondly, and this is the key incentive for the investors to get that capital into the Qualified Opportunity Funds and then have the funds invested in the distressed communities, if the investor hold the investment in the QOF for, at least, 10 years, then the investor is eligible for an adjustment to their tax basis of their Qualified Opportunity Fund investment to its fair market value on the date the QOF investment is sold or exchanged. So what that means is that, as a result of this basis adjustment, if the investor is electing after 10 years, the appreciation on that QOF investment in the fund, in the Qualified Opportunity Fund, will never be taxed. That is a unique tax benefit for long-term investors investing eligible gains into the Qualified Opportunity Funds. So that's really how the program works under the legislation, get the capital through eligible gains, timely invested into Qualified Opportunity Funds, and then the funds will invest in Qualified Opportunity Zone Property. And for definitions of Qualified Opportunity Zone Property, Anna, and qualified Opportunity Zone Businesses, I would refer you back to that very important and very instructive Fact Sheet that Philip mentioned in discussing the resources, which we just put out on our website in August. FALKENSTEIN: OK, awesome.

Thank you so much. And speaking of Philip, I've got, I've got a quick question for you, Philip, and I'm going to just kind of briefly summarize it, because, we don't have much time. It sounds like, you know, you went through all of these forms and whatnot. Is it true that you have to actually report on the form, even though you may not have done anything with that investment in a, in a tax year? So once you've made the investment, you're going to be reporting on it every year, is that correct? YAMALIS: That's correct. So … FALKENSTEIN: And what's that form? YAMALIS: Yes. The Form 8997, as a reminder, is the annual reporting of a QOF investment, you have to annually certify using that Form 8997, parts one, two, three, and four, every year to self-certify that QOF. Simple as that. FALKENSTEIN: OK. All right. And it sounds like, you know, that's going to really help you with your record keeping too that you're not skipping years? YAMALIS: Absolutely, you'll be able to see that annual certification each year. But it is very, very important to have that great record keeping to keep track of that basis and to keep track of that investment. FALKENSTEIN: OK, I'm going to jump right back to Laura. I do have a good question for you that I don't think we really touched on too much and I think, I think it's important that we understand it as well. And I'm just going to read the question that says, I sold some business property under an installment method in 2017. If I receive payments which trigger capital gains on that sale in 2020, would these gains be considered a qualified gain that could possibly be eligible for investing in the QOF? SCHMITZ: Thank you, Anna. I just want to make sure, again, that you can hear me. FALKENSTEIN: Yes.

SCHMITZ: OK. Yes, those gains are eligible for investing in the QOF and eligible for the deferral in the Opportunity Zone benefits. All of your eligible gains from the installment sales are eligible for deferral to the extent that it's timely invested in the QOF. For the start of the 180-day period, you can choose the date the payment is received, or the last day of the taxable year, of your taxable year. If you receive more than one payment and you decide to treat the date of the payment as the received at the beginning of your 180-day period, each payment date will begin a new 180-day period. Does that answer the question? FALKENSTEIN: That does, but just to piggyback on that. But it sounded like you could take each all of those, and because you're reporting all of it on the end of the year, you could do one date also, is that correct? SCHMITZ: Yes, you could do, if you had multiple payments, an installment payments received, you could choose to have your, with your calendar year, you could choose to have 12/31 of 2020 as the start of your 180-day period, or you could choose each one of them as being the start of 180-day period. FALKENSTEIN: OK. Oh, here's a good question. Rich, I'm going to throw this one at you. And I know we're almost over with the time but let me, let me just throw this out there. This person says, I've filed my return and reported a capital gain, is there any circumstance in which I could go back and amend my return, so that I could invest it in a QOF? Is that possible? FURLONG: It is, Anna. If, they certainly could amend their return to report a qualifying investment into the Qualified Opportunity Fund if they met all of the requirements we've discussed this afternoon, and for an individual or a married couple, they would use, of course, Form 1040-X for that purpose, and then they would attach the Form 8949 to show the elected deferral and the Form 8997. So, yes, it can be done under certain circumstances, Anna. FALKENSTEIN: I think the timeframes would just have to fall perfectly, right? FURLONG: Yes, they would certainly have, at first have that eligible gain and then make the investment in the Qualified Opportunity Fund within normally the 180-day period as we discussed earlier. FALKENSTEIN: OK. FURLONG: Possibly extended through the COVID-19 disaster relief. FALKENSTEIN: OK, excellent. And, Phil, I just have a quick one for you, and I think, after that, we've got to kind of cut things off. But, you know, we talked about looking at the Opportunity Zones, could you just quickly remind us where to find that information? YAMALIS: Since we're doing it quickly, I'll quickly tell you how you can see them on a map. So Qualified Opportunity Zones, remember, they were selected by the governor or chief executive of each state district or U.S. territory or county, maps are available on the resources page of Opportunityzones.gov, Opportunityzones.gov/resources/map. An excellent map, you could see all the Opportunity Zones. Also, under the Opportunity Zones Resources which is available at CDIFFund.gov. FALKENSTEIN: Thank you very much. Well, audience, that's all the time we have for the questions. They were awesome questions. I wish we could have gotten some more. I want to thank Laura, our Subject Matter Expert, and Rich and Philip, for sharing their knowledge and expertise, and for answering the questions that we were able to get to today. Before we close this Q&A session, Rich, can you just remind us some key points that you want our audience to take away today? FURLONG: Certainly, Anna. And just with regard to the questions coming in, and there were excellent questions by variety of individuals, we will look at, our team we'll look at those questions and we will use those questions as we craft outreach and communication materials going forward. But in today's time, even though it was limited, we covered quite a bit of ground. We provided an overview of the Opportunity Zones, including defining, what is a Qualified Opportunity Zone and what is a qualified opportunity fund. We also discussed, primarily, the tax benefits available for Qualified Opportunity Fund investors, including the requirements for those investors to receive those benefits. Importantly, the proper reporting of the investor elections, and also, now, the annual investor reporting. And then, finally, we provided Opportunity Zone COVID-19 relief information. And again, one more pitch for that Fact Sheet that our Communication and Liaison team released in August. That Fact Sheet which is part of your resources has links to an extensive set of frequently asked questions, other materials including the Treasury regulations, some of these forms, and you can save that PDF of the Fact Sheet and refer to this material going forward. So with that, Anna, let me turn it back to you to wrap up. FALKENSTEIN: All right, thank you, Rich. Audience, we are planning additional webinars throughout the year. To register for an upcoming webinar, please just visit IRS.gov keyword search Webinars. At that point, you can select Webinars for Tax Practitioners or Webinars for Small Businesses. When appropriate, we will be offering certificates and CE credit for upcoming webinar. We invite you to visit our IRS Video Portal at www.irsvideos.gov. There, you can view archived versions of our webinars. Now, continuing education credits or certificates of completion are not offered if you do view an archived version of our webinars on the video portal. Again, I want to extend a big thank you to Laura, Richard and Philip for a great webinar and for sharing their expertise. I also want to thank you, our attendees, for attending today's webinar, Tax Cuts and Jobs Act (TCJA) Update: Opportunity Zones. Now, if you attended today's webinar for at least 50 minutes after the official start time, you will receive a Certificate of Completion that you can use with your credentialing organization for one possible CE credit. Now, the time we spent chatting before the webinar started does not count towards the 50-minutes. If you're eligible for continuing education from the IRS and registered with your valid PTIN, your credit will be posted to your PTIN account, and if you're eligible for continuing education from the California Tax Education Council, your credit will be posted to this CTEC account as well, and if you registered to the Florida Institute of CPAs, your participation information will be provided directly to them. Now, if you qualify and have not received your certificate or credit by September 24th, please e-mail us at CL.SL.Web.Conference.Team@irs.gov, and the e-mail address is shown on this slide. And if you're interested in finding out who your local Stakeholder Liaison is, you can send us an e-mail using the IRS shown on this slide and we'll send you that information. We would appreciate if you would take a few moments to complete a short evaluation before you exit. If you like to have more sessions like this one, let us know. If you have thoughts on how we can make them better, please let us know that as well. And if you have any requests for future webinar topics or pertinent information, perhaps, you'd like to see a new IRS Fact Sheet, a Tax Tip, or an FAQ on IRS.gov, please include those suggestions in the comment section of the survey, just click on the survey button on your screen to begin. And remember, if it doesn't come up, you may want to check and make sure that you have disabled your pop-up blocker. It has been a pleasure to be here with you today. And on behalf of the Internal Revenue Service and our speakers, we'd like to thank you for attending today's webinar. It's important for the IRS to stay connected with the tax professional community, individual taxpayers, industry associations, along with our federal, state and local government organization. You make our job a lot easier by sharing the information that allows for proper tax reporting. Thanks again for your time and attendance and we wish you very much success in your business or practice. You may exit the webinar at this time.