New Tax Form 8996; The Internal Revenue Service (IRS) and the Treasury Department of the United States propose opportunity zone tax form. According to the details, a draft version of a proposed tax form is released jointly by the IRS and Treasury for the collection of information regarding the qualified opportunity zones in USA. The proposed Form 8996 has been released that requires information about the qualified opportunity funds for the U.S. taxation year 2019.
What Are Opportunity Zones for New Tax Form 8996?
For those readers who do not know about opportunity zones, they were introduced in by the tax cuts law of the year 2017. Opportunity zones present substantial tax breaks on capital gains specifically for all those people who invest in real estate projects of the economically distressed communities. Thus, opportunity zones basically allow some investors for deferring their capital gains taxes for years or even for an indefinite period. For your complete taxation services in USA, Black Ink is here to solve any problem that you are facing on behalf of personal or business taxes in USA.
New Tax Form 8996; Benefits of Opportunity Zones:
Investors can get the advantage to defer their capital gains taxes for indefinite period of time. Although the investors are paying a great deal of interest towards these funds, but some accusations are also prevailing about these funds. Some of those accusations include location of many zones in gentrifying areas, which have already started to attract investments. Another accusation is about those politically connected investors who are getting benefits from the description of opportunity zones in those areas where the investors already possess a property or any underway development.
Regardless of the hype and interest of the opportunity zone funds, they did not result in generating as much investment money as expected in the early stages. One reason for this outcome is the slow response from the IRS and the Treasury regarding rolling out the regulations and guidance about opportunity zones. Many of the investors are still worried about the provisions that how they will be applied. But now, investors can get answers to all of their questions from the new version of tax form regarding opportunity zones and their benefits in the United States.
Improvements in New Tax Form 8996:
According to the newly proposed Tax Form 8996, the information regarding the complete qualified opportunity zone property held by the taxpayer in USA on the last day of the 1st six-month period of the taxpayer’s tax year is required. Furthermore, the taxpayers are also eligible for the calculation of any tax penalty if in case the opportunity zone fund has failed in maintaining the essential investment standards. Moreover, the draft form 8996 also requires the taxpayers to submit line-by-line details of all qualified opportunity zone business properties that are either directly owned or leased by him/her as well as any qualified opportunity zone stock or partnership interests. Another purpose of this form is the collection of all information about the amount of investment by the qualified opportunity funds (QOFs) in business property by census tract.
The new draft version of Tax Form 8996 requires the qualified opportunity funds (QOFs) for reporting the Employer Identification Number of each business that holds the QOF has an ownership interest, the census tract location of the tangible property of the business as well as the value of the QOF’s investment in the business. Furthermore, the QOFs are also required for reporting the value and census tract location of qualified business property that are either leased or owned by the QOFs directly. A social security number cancellation scam is also running, so be aware of it if you face it.
With the help of this information, the Treasury Department will be able for monitoring the amount of investment received by a variety of tracts over a period of time. With the combination of investment information with the data on income and employments, the public as well as the policymakers will be able for the better evaluation of the effects of the opportunity zone tax break. It will also lead to uncover the understanding that why enticing investors are more successful in some locations than others. To know more about financial planning with opportunity zones in USA, you can click on the link.
Press Releases about New Tax Form 8996:
The Treasury Secretary, Mr. Steven T. Mnuchin, said in a press release,
This is an important step towards a thorough evaluation of the Opportunity Zone tax incentive. We want to understand where Opportunity Zone investments are going and strengthening the economy so that investors and communities can learn from the successes of this bipartisan, pro-growth policy.
The ranking Democrat on the Senate Finance Committee, Mr. Sen. Ron Wyden, D-Ore., also shared his thoughts about opportunity zones tax form in the United States,
Requiring taxpayers to prove they’re actually following the rules of the Opportunity Zone program is a positive first step, but it’s one that should have been taken two years ago, instead of prioritizing rules to let the Treasury secretary’s cronies profit at taxpayers’ expense. The opportunity zone program has been operating without any effort to ensure compliance and that’s inexcusable.
That was all about the New Tax Form 8996; If you need help to prepare taxes in USA, then we provide the best proven results with maximum refunds. Request call back with our representative to best planning of USA taxes!