How do I elect qualified opportunity zone deferrals in Turbo Tax Deluxe 2018?

[dave16b]

I have turbotax Premier.  This reminds me of when I used Turbotax deluxe and they dropped some of the functionality.  Intuit made it right by offering an upgrade to Premier which I have been using since.  Not aware of a higher level thast is applicable.  Are you the wrong software for use with a key revision of the recent tax cut?

[ttuser12345]

I do have turbotax Premier as well. Can Turbotax do another update to support this opportunity zone deferral? If not, are there any other software that supports it? Or how can I override the options in the 8949 form?

[steved]

Turbotax support just confirmed that they will not support QOF deferrals this year.  Has anyone figured out the best places to override in order to enter this?  I know it at least needs to be entered on 8949 and someplace for AMT, but I'm not sure that's sufficient.  I also want to defer unrecaptured sec 1250 gains and it's not clear (even in the IRS docs) how to document that.

[lori58sf]

TT:  will you support deferring gain by investing in QOZ , and support code Z on Form 8949 box F for 2019 tax year filing?  Can you make an official statement in NOV 2019 when you release TT software to the marketplace?  Thanx

[woodward-apart]

Closing this out, I was able to elect the deferrals in TurboTax with the aid of overrides (which forces paper filing).

Federal:

1. Step-by-step: Add a sale. Select "No 1099-B". Choose everything else.  Add the OZ election as described in form 8949 instructions. (only question that is relevant will be name (use the EIN), disposal date, and whether you acquired over a year ago. Blank out everything else)
2. Go to forms; find the 8949 with the OZ election. For the OZ row(s), use overrides to wipe columns d, e, and f.  Insert the actual OZ amount in column G.  Add code Z to column F.
3. Validate tax was altered as expected

State:

For CA (which doesn't conform), I went to the State schedule D (D(540) and in the smart worksheet, checked the box (under sales price) in the OZ rows. This led to the OZ deferrals being excluded from the state capital gains worksheet.

[dbagin816]

TurboTax - This should be a very easy thing to do - You are going to lose a lot of business if you don't implement a way to elect the deferral...

[az9215]

if I have some capital loss inherited from tax year 2017, will that take precedence before the my investment to the QOF? or in other word, can I reserve the capital loss to next year and defer all my capital gain in year 2018 to the QOF? thanks!

[TahoeJeff]

@woodward-apart  Thanks for your update on this, I'm just trying to figure it out now with the extension due 10/15.  Shocked that 2017 tax laws are not fully supported by TurboTax.  Looking at your approach, how might this work if your gain to defer is coming from multiple sources like 1099-B's from broker statements with multiple income elements on it, which should be included in total and matching of course?  And/or from K-1's with gains from trusts or other investments.  Are you saying that you add a new investment sale that is only for the QOZ deferral 'reversal' and don't need to impact other income source documents?  Or you somehow need to effect those docs/forms also?  I'm concerned about Fed only and greatly appreciate your help and expertise!  

[DBaty]

I do not understand the first part of the work-around. When I key in everything else, it goes to ask about details on a sale. Do I ignore everything and then go to 8949. I am deferring gains from a lot of sales made at year end. Do I just put dummy information in? Leave it blank?  I am desperate - I need to get taxes filed. I am happy to pay for your time if you can walk me through the process. I am available at [email address removed] 

[TahoeJeff]

Hi @DBaty Did you get your questions answered? I just did this, and you can use an existing 8949 to add the QOF investment amount or open a new one. You may have multiple 8949’s already if you have different cap gain types that require different tax treatment. You add a new row with the QOF’s EIN, the code Z, investment date and amount through overriding the fields (desktop version at least) and use a (-) amount for the investment as the post describes.  That creates the credit to your capital gain and reduces it by the amount you are investing in the QOZ.  That’s it, you will see the impact below on that form. You don’t have to link the investment with specific gain sources, just add a line item with the invested amount. You’ll want to check the AMT cap gain form also and do something similar there to reduce your total cap gains for AMT purposes.  Hopefully Intuit will actually include support for this investment type in 2019.

[greenbergs]

Has this situation improved for 2019 tax software?

[TahoeJeff]

Haven't heard anything yet, but I will be installing the desktop version soon.  It required manual changes, printing and mailed returns last year

[dgsloss]

TaxAct (desktop version) handled this in 2018.

[greenbergs]

Could you still file electronically with Tax Act?

[dgsloss]

I did e-file with Tax Act in 2018 but not with a QOF deferral.  I was actually using 2018 Tax Act to analyze the benefit of a 2019 QOF deferral prior to the release of the 2019 version.  It handled it as expected, i.e. Box F, with Code Z.  It transferred to forms as the form 8949 instructions state.   I see no reason that it would not file electronically.

For several years, I have also used TurboTax (premier or higher) in parallel to provide a double check.  I've had some complicated tax situations that justified the cost (short of a CPA).  As part of my analysis of a potential QOF deferral in 2019, I also tried to run the scenario in 2018 TurboTax.  It provided no way to do it as I had in Tax Act.  That's how I ended up here.  I found it unbelievable that Turbo Tax couldn't do it when Tax Act did.  As it turns out TT didn't do it in 2018 and won't provide it in 2019 either (seemingly).