INCOME TAX

NOT 2019-32, page 1187. The Department of the Treasury and the Internal Revenue Service anticipate issuing regulations and other guidance to implement the provisions of § 45Q of the Internal Revenue Code, as amended by Section 41119 of the Bipartisan Budget Act of 2018 (BBA), Pub. L. No. 115-123 (February 9, 2018). This notice requests general comments on issues arising under § 45Q, as well as specific comments concerning the secure geological storage and measurement of qualified carbon oxide, the recapture of the benefit of the credit for carbon oxide sequestration, and other issues described in section 3 of this notice.

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REG-120186-18, page 1193. This document contains proposed regulations that provide guidance under new section 1400Z-2 of the Internal Revenue Code (Code) relating to gains that may be deferred as a result of a taxpayer’s investment in a qualified opportunity fund (QOF), as well as special rules for an investment in a QOF held by a taxpayer for at least 10 years. This document also contains proposed regulations that update portions of previously proposed regulations under section 1400Z-2 to address various issues, including: the definition of “substantially all” in each of the various places it appears in section 1400Z-2; the transactions that may trigger the inclusion of gain that a taxpayer has elected to defer under section 1400Z-2; the timing and amount of the deferred gain that is included; the treatment of leased property used by a qualified opportunity zone business; the use of qualified opportunity zone business property in the qualified opportunity zone; the sourcing of gross income to the qualified opportunity zone business; and the “reasonable period” for a QOF to reinvest proceeds from the sale of qualifying assets without paying a penalty. These proposed regulations will affect QOFs and taxpayers that invest in QOFs.