[Federal Register Volume 86, Number 148 (Thursday, August 5, 2021)]
[Rules and Regulations]
[Page 42716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16663]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9889]
RIN 1545-BO4


Investing in Qualified Opportunity Funds; Correcting Amendment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to Treasury Decision 9889, 
which was published in the Federal Register on Monday, January 13, 
2020. Treasury Decision 9889 contained final regulations under the 
Internal Revenue Code (Code) that govern the extent to which taxpayers 
may elect the Federal income tax benefits with respect to certain 
equity interests in a qualified opportunity fund (QOF).

DATES: These corrections are effective on August 5, 2021 and applicable 
on or after January 13, 2020.

FOR FURTHER INFORMATION CONTACT: Concerning section 1400Z-2 and these 
regulations generally, Harith J. Razaa, (202) 317-7006, or Kyle C. 
Griffin, (202) 317-4718, of the Office of Associate Chief Counsel 
(Income Tax and Accounting). These numbers are not toll-free numbers.

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9889) that are the subject of this 
correction are under section 1400Z-2 of the Code.

Need for Correction

    As published on January 13, 2020 (85 FR 19082) the final 
regulations (TD 9889) contain errors that need to be corrected.

List of Subjects in 26 CFR Part 1

    Income Taxes, Reporting and recordkeeping requirements.

Correction of Publication

    Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *

0
Par. 2. Section 1.1400Z2(d)-1 is amended by revising paragraphs (a)(3) 
and (d)(3)(vi)(D) to read as follows:


Sec.  1.1400Z2(d)-1  Qualified opportunity funds and qualified 
opportunity zone businesses.

* * * * *
    (a) * * *
    (3) Self decertification of a QOF. If a QOF chooses to decertify as 
a QOF, the self-decertification must be effected in such form and 
manner as may be prescribed by the Commissioner in IRS forms or 
instructions or in publications or guidance published in the Internal 
Revenue Bulletin (see Sec. Sec.  601.601(d)(2) and 601.602 of this 
chapter.)
* * * * *
    (d) * * *
    (3) * * *
    (vi) * * *
    (D) Safe harbor for working capital and property on which working 
capital is being expended--(1) Working capital for start-up businesses. 
For start-up businesses utilizing the working capital safe harbor, if 
paragraph (d)(3)(v) of this section treats property of an entity that 
would otherwise be nonqualified financial property as being a 
reasonable amount of working capital because of compliance with the 
three requirements of paragraphs (d)(3)(v)(A) through (C) of this 
section, the entity satisfies the requirements of section 1400Z-
2(d)(3)(A)(i) only during the working capital safe harbor period(s) for 
which the requirements of paragraphs (d)(3)(v)(A) through (C) of this 
section are satisfied; however such property is not qualified 
opportunity zone business property for any purpose.
    (2) Tangible property acquired with covered working capital. For 
any eligible entity, if tangible property referred to in paragraph 
(d)(3)(v)(A) is expected to satisfy the requirements of section 1400Z-
2(d)(2)(D)(i) as a result of the planned expenditure of working capital 
described in paragraph (d)(3)(v)(A), and is purchased, leased, or 
improved by the trade or business, pursuant to the written plan for the 
expenditure of the working capital, then the tangible property is 
treated as qualified opportunity zone business property satisfying the 
requirements of section 1400Z-2(d)(2)(D)(i), during that and subsequent 
working capital periods the property is subject to, for purposes of the 
70-percent tangible property standard in section 1400Z-2(d)(3).
* * * * *

Oluwafunmilayo P. Taylor,
Federal Register Liaison, Publications and Regulations Branch, Legal 
Processing Division, Associate Chief Counsel (Procedure and 
Administration).
[FR Doc. 2021-16663 Filed 8-4-21; 8:45 am]
BILLING CODE 4830-01-P