IRS Updates Form for Opportunity Zone Filings

The IRS last week released a draft version of the updated Form 8996, which is required to be filed by all Qualified Opportunity Funds (QOFs). The IRS indicated earlier this year that it would further update this form, and it is likely that a final version will be available prior to the end of the year. The draft form is available on the IRS website. The latest draft version of Form 8996, dated Oct. 30, 2019, would require QOFs to:

• Disclose employer identification numbers (EINs),
• Identify census tract numbers and the value of investments in those specific census tracts,
• Differentiate between leased and owned property, and
• Break down investments between those owned directly by the QOF and investments made via a qualified opportunity zone business, which are held as stock or partnership interest.

When investing in a separate qualified opportunity zone business, the QOF would also be required to disclose that business’s EIN, as well as the specific census tracts in which that business has invested. QOFs can take the form of either a partnership or a corporation, and serve as the vehicle for making qualifying investments into an opportunity zone. For more information on opportunity zones, please visit nahb.org/oz.