Initiated by the 2017 Tax Reform bill, Qualified Opportunity Zone Funds were created to encourage economic development in thousands of low-income areas across the United States and have unique tax-advantaged structures. As Opportunity Zone’s are a relatively new financial device – new tax forms are provided to account for them. See below for three new OZ-related tax forms to know and links to the full IRS.gov instructions for completing these forms:
- Form 8996 – New IRS form. Only file if you are creating your own OZ fund.
- Form 8949 – This is part of a the larger Schedule D. Designates the capital gains deferred for an OZ investment. Capital gains designated for deferral into an OZ are denoted with a code “Z”.
- Form 8997 – New IRS form. Discloses all OZ investment holdings, additions, and dispositions during the relevant period.
