Hello all that are interested in this subject. As concluded, Turbo Tax will not support these kinds of investments, and I had to use TaxAct Online. I believe there is one other online company that can do them, but I do not know their name.
First of all, I am NOT a CPA but I am a retired Federal Auditor and familiar with the tax law. As always, consult with your tax advisor, do not construe this to be "advice" for your circumstances.
Ok, I got hit with a whammy. I invest in a QOZ. The company informed the investors that there are too many hoops to jump through on the construction projects which has been very frustrating. So they are "Buying back" all the investments. NOOOOOO!!!! This will cause me a problem!
I contacted two QOZ companies (Let's call them A and B) about "rollover." Both companies said they were totally unaware of any "rollover" process. And both companies were shocked that a QOZ company was going to "throw in the towel" and dissolve. One of the two companies (B) said that they did have clients who had "voluntarily" taken a redemption due to dissatisfaction with the QOZ investment they had and then re-invested the proceeds with Company B.
The fund I invested in (Let's call it X) told me that the QOZ law allows one to take a redemption but you must reinvest within 12 months to keep the tax benefits. I haven't verified that this is true or not, but my question on this is....
1. If you take a redemption and re-invest, do you get to keep your original investment date on your forms, because if I re-invest now, I will lose the 10% exclusion (I didn't qualify for the 15% exclusion) when I have to claim them in 2026 (and all companies I talked to know there is a pending law change in Congress to extend this to 2028...).
2. I am not sure TaxAct Online or even any software used by CPA's have a way to show your investment redemption and reinvest.
And even if I do have 12 months to reinvest, I need to do it by year end this year or I will have to claim gains and then amend after I did a reinvest later. Right now the IRS is SO DUMB that doing a 1040X will get you in big trouble even if you know what you are doing. I had this problem when I tried to do a 1040X recently. Took me three months to convince the IRS I was right. Once they agreed I was right they changed their numbers to match mine and decided not to charge me interest even though technically they could have.
If anyone is interested in this topic, I will try to keep updated when I find out more. I feel that even with TaxAct I am going to have major issues trying to do the 8949 and 8997 for 2023 because I have to redeem a QOZ and reinvest it.
