Does TurboTax support Qualified Opportunity Fund (QOF) reporting for form 8949, box f code Z, and form 8997, the annual statement of QOF funds?

[Gator1944]

How can I file the form without a CPA?

[mkossman]

Has anyone successfully obtained a refund from TurboTax for the cost of the software? It's ridiculous that it doesn't support Form 8997 and, setting aside the workaround noted in this string, it's now useless. I believe Form 8997 has to be filed annually (until QOF matures or is sold), so it's no only useless this year, but for 10-12 years to come! @TurboTax what are you doing about this?!

[Anonymous_]

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@mkossman wrote:

I believe Form 8997 has to be filed annually (until QOF matures or is sold), so it's no only useless this year, but for 10-12 years to come!

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Is it getting extended? Otherwise, if not, the deferred gain has to be included on or before 12/31/2026.

See https://www.irs.gov/credits-deductions/opportunity-zones-frequently-asked-questions

[mkossman]

Yes, that's right. Was getting the two benefits mixed up in my TT frustration (sorry!). Gain has to be reported by 2026, but the gain exclusion on the QOF itself remains as long as you hold onto it for 10 years. 

[mkossman]

I may be getting fuzzy at the end of the day and after lots of clicks and staring at this, but it seems like all the fields on 8949 can be overridden, so it is allowing me to enter a negative gain (for the QOF deferral), and then I could complete an 8997 manually and file the return on paper. Not a great solution, but at least I wouldn't have to convert to a new app this year.

[gyaqwe]

Great info and work-around folks.

If one does add a Form 8997, then e-File is out of the question, am I right? Need to switch to paper?

Also generally speaking (not TT related) - can I select which Cap-Gains I'm offsetting with QOF? obviously I want to do this only/mainly for Short-term CG.

Thanks for any tips!

-G

[CatinaT1]

Correct, the program does not support this form.

[gyaqwe]

@CatinaT1  Thank you. Is it acceptable to e-file the entire return and only send 8949 by mail? OR else file without QOZ electronically and then file QOZ as an amendment? Trying to avoid a complete paper return, here. TIA

[DaveF1006]

No. If you report QOF investments in your return and if you deferred gains from these investments, the 8997 needs to be filed with your return. 

[gzhuwea]

Hi, did it work for you? I am planning do the same. Efile with negative gain, and then send in the paper 8997.

Thank you

[ey0678]

Here is what Copilot replied:

Yes, the IRS allows you to e-file your tax return and then mail in Form 8997 separately. If you choose this method, you should send Form 8997 along with Form 8453 to the IRS within three da....

Here is the address for mailing:

Internal Revenue Service
Attn: Shipping and Receiving, 0254
Receipt and Control Branch
Austin, TX [removed]

[rjs]

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@ey0678 wrote:

Here is what Copilot replied ...

Copilot sometimes gives wrong information.

Form 8997 is not one of the forms that can be sent with Form 8453. The instructions for Form 8453 say the following.

"CAUTION
Don’t attach any form or document that isn’t shown on Form 8453 next to the checkboxes. If you are required to mail in any documentation not listed on Form 8453, you can’t file the tax return electronically."

Form 8997 is not listed on Form 8453. There is no checkbox for Form 8997 on Form 8453, so Form 8997 cannot be sent with Form 8453.

[TahoeJeff]

That's when you have to recapture the deferred gain, but that's not the end of QOF tracking as you also (in early cases) were able to eliminate some gains on the new investment. So I'd assume you do have to manage this for 10 years or longer, however long you hold it

[PeterBro]

I wish turbotax would at least add the forms and allow us to fill them out manually and submit our returns electronically.  Most years nothing has to be calculated, just a very simple report on form 8997.  I've been using Turbotax for 30 years+ and still use it but have to pay a CPA to file my return.  Sad.

[gyaqwe]

Agreed! It's been 7-8 years now. And they still don't support it. I was forced to move to Taxact because this.