Key Dates for Deferring Capital Gains Taxes with Opportunity Zone Investments

Dear Investor Partners,
As we end the first quarter of 2021 it is helpful to be aware of key dates and deadlines for Opportunity Zone investments and tax deferral.

Key Dates in 2021:

  • March 31, 2021: Deadline to invest any gains recognized by an individual taxpayer from October 4, 2019 through October 2, 2020. This is also the deadline to invest any 2019 gains recognized through a passthrough entity (partnership or S-Corp) Schedule K-1, going back as early as January 1, 2019. We are expecting a flurry of investment into Qualified Opportunity Funds as this date approaches.
  • September 11, 2021: The deadline to invest any 2020 gains recognized through a passthrough entity (partnership or S-corp) Schedule K-1, going back as early as January 1, 2020. We are expecting a flurry of investment into Qualified Opportunity Funds as this date approaches.
  • December 31, 2021: The final date for investors to place capital into a Qualified Opportunity Fund and be eligible for the 10-percent basis step-up, which grants the taxpayer a 10 percent reduction in the amount of capital gains recognition on the original capital gains. We are expecting a flurry of investment into Qualified Opportunity Funds as this date approaches.

Opportunity Zone Investment Deadlines:


Capital Gain Recognized by Individual

  • Capital Gain Event Prior to October 4, 2019: Your deadline to invest has already passed.
  • Capital Gain Event Between October 4, 2019 and October 2, 2020: Your deadline is March 31, 2021.
  • Capital Gain Event After October 2, 2020: Your deadline is 180 days after your recognition event.

Capital Gain Recognized Through a Passthrough Entity Schedule K-1

  • Capital Gain Event in 2019: Your deadline is March 31, 2021. (Original due date of September 11, 2020, extended to March 31, 2021 by IRS Notice 2021-10.)
  • Capital Gain Event in 2020: Your deadline is September 11, 2021. (Partnership returns due date of March 15, 2021 + 180 days.)
  • Capital Gain Event in 2021: Your deadline is September 11, 2022. (Partnership returns due date of March 15, 2021 + 180 days.) However, in order to be eligible for the 10-percent basis step-up, your capital needs to be invested in a Qualified Opportunity Fund by December 31, 2021

Hopefully this will clear up any confusion and conflicting information out there. Time moves fast with this so if you are looking to defer capital gains and want to discuss solutions, please call Tom Casper at 407-450-1889.