Well the IRS has finally issued the regs and forms for that and my professional program has incorporated it for 2018 so the TT program should have it in the 2019 version ... but we may need to wait and see.
That would be great. Fingers Crossed, How will turbo tax communicate that they will be implementing the support?
Could somebody from TurboTax please comment on whether or not they will support investment in Opportunity Zone Funds and IRS Form 8949?
As of now it is not in the program ... but the 2019 program is far from fully operational ... check again in January .. here is the prior discussion on this subject which describes how to use the Downloaded version to complete an override in the forms mode....
If you do a manual override then you can NOT e-file your return which is begging for an audit by mailing in a paper copy.
If anyone gets any further updates on whether the 2019 software will support Opportunity Zones, please post here.
Crazy to me that Turbotax can't provide clarity on whether they will or will not have this supported.
If they don't, I will be hiring an accountant for the first time in 20 years.
I wish TurboTax would chime in on this and simply tell the community if they are planning to include this capability or not! I did have to hire an accountant last year because TurboTax lacked this and will have to again if it doesn't support it.
Manually entry/override is NOT an option! When you do that you then must file your return in paper as Turbo Tax won't let you e-file and doing that on a long return is almost a guaranteed audit.
This is my question, too. Turbo Tax, please respond. I tried to reach someone at TT by phone on this issue with no success...even with a support ID. Frustrating.
I dont see any issue here on QOZ investment reporting in Turbotax. I do my taxes in Turbotax and then a CPA reviews before I submit.
No idea if the step by step interview supports QOZ, but you can certainly make the necessary entries manually on Form 8949. Note that this does not require "overrides" or anything that would prevent you from filing electronically.
Here are the instructions from the IRS pub Instructions for Form 8949 (2019)
[Draft as of October 8, 2019] :
Report the deferral of the eligible gain
on its own row of Form 8949 in Part I with
box C checked or Part II with box F
checked (depending on whether the gain
being deferred is short term or long term).
If you made multiple investments in
different QOFs or in the same QOF on
different dates, use a separate row for
each investment. If you invested eligible
gains of the same character (but from
different transactions) on the same date
into the same QOF, you can group those
investments on the same row. In column
(a), enter only the EIN of the QOF into
which you invested. In column (b), enter
the date you invested in the QOF. Leave
columns (c), (d), and (e) blank. Enter code
“Z” in column (f) and the amount of the
deferred gain as a negative number (in
parentheses) in column (g).
NO... you can NOT make manual entries for this unless you want to file your return in paper!!!
e-file will not work if you do a manual over ride!
TurboTax... SPEAK UP... are you including this feature or not for 2019!!!
One of the Help Pages in the 2019 desktop software says:
"- Qualified Opportunity Funds deferral of eligible gains via investment into a Qualified Opportunity Fund (QO Fund) is not supported in TurboTax."
___________________
But then, some of these help pages can be behind the times and not updated properly for the next tax year.
....but it certainly isn't in the current software...dn the Code Z for a form 8949 is entirely absent.
But I'll ask
Deferred gain for Qualified Opportunity Funds (Codes Y and Z on Form 8949) is in the list of Unsupported Calculations for 2019 TurboTax. It is not supported and is not going to be supported.
Here is the statement in the Unsupported Calculations document dated January 2, 2020. This is on page 4.
31. Deferred Gains for Qualified Opportunity Funds (Form 8949 for Codes Y and Z): The program does not support the reporting of deferring tax on an eligible gain by investing in a QOF, by using Code “Z” in column (f). The program does not support the reporting of the amount of eligible gain that you previously deferred and now need to recognize by using Code “Y” in column (f).
The PDF document is at the following link.
Unsupported Calculations and Situations in the 2019 TurboTax Individual Federal Tax Software Program
Note that if you invest in a Qualified Opportunity Fund, or use code Y or Z on Form 8949, you must also file Form 8997, which is not included in TurboTax. The IRS has not yet issued Form 8997. Form 8997 must be filed with a tax return that is filed by the filing deadline (including extensions).
Just curious, Since TT does not currently support Opportunity Zone filing and seems to have no intention of doing so, and since the IRS has not yet provided the proper form 8997, can both of these be submitted at a later date in the form of an amendment done by paper filing?
@vmann53 There are a lot of potential problems with that approach. First of all, as I said above, Form 8997 must be filed with a tax return that is filed by the filing deadline (including extensions). You might be able to add it with an amendment that is filed by the filing deadline, but getting the original return and the amendment both filed before the deadline would require careful timing, and it's not clear that this procedure would be acceptable.
The amendment would show either deferral of gain or recognition of previously deferred gain (or both) on Forms 8949 and 8997, but you have no way of integrating the changes with the TurboTax return. You would have to recalculate the entire return by hand, which would be difficult and error-prone. And since you then would not have a TurboTax file for the amended return, you would not be able to transfer information from the return to your return for the following year.
If you file your original return without deferring the gain, planning to amend later to defer it, you would have to pay the tax on the gain that you are planning to defer, then wait to get a refund after the amended return is processed. It takes the IRS 4 months or more to process an amended return.
On the whole, this seems like a bad idea. It would be much better to either find software that supports it, or go to a tax professional who has such software.
I spoke with a turbo tax specialist today who said that 2019 TT does support opportunity zone form in the highest level of the turbo tax package. Not entirely clear on which product that is, as she referenced repeatedly the highest level. The worksheet is now part of the program, she acknowledged that it had to be done offline for 2018. If you're able to get more clarification, that would be helpful. I went via the "speak live" option in the Contact Us section. After speaking with the standard product person, they had one of their CPAs call me back for the specific question.
What about this approach:
- create a new sale of stock, checking box F for long-term unreported gains
- box 1A: enter the EIN for the QOF
- box 1B: enter the date the QOF investment was made
- box 1D Proceeds: enter 0
- box 1E Basis: enter 0
- check the box for "the cost basis is incorrect"
- click through the next screen "none of these apply"
- check the button for "I know my cost basis and need to make an adjustment"
- enter the amount of gains you are deferring as a positive number into the cost basis field
I think, but am not sure, that this gets all the right fields filled out correctly in form 8949 (turbotax I think will show a negative adjustment to your cost basis in 8949 column (g). One problem is there is still no way to indicate code "Z" in column (f).
What do you think does this work?
@mkneale Your approach will not work. It will not put code Z in column (f) on Form 8949, and it will not include the required Form 8997 in your tax return.
I repeat what I said above:
"Deferred gain for Qualified Opportunity Funds (Codes Y and Z on Form 8949) is in the list of Unsupported Calculations for 2019 TurboTax. It is not supported and is not going to be supported."
If you want to defer capital gain by investing in a Qualified Opportunity Fund, you cannot use TurboTax to file your tax return. There is no way to make it work.
@rjs , why are you so negative about using Turbotax to do this? You can absolutely do overrides on form 8949 to make it work. (though yes you have to paper file). I explained it here
I agree thought that at this point I would prefer to use another product that properly supports code Z (does any?). It's embarrassing TT still hasn't added support.
The form 8997 is already available from IRS, but the fact that TurboTax doesn't even allow you to add that form manually, so at least all of your forms would be within the same tax file, really makes me reconsider my 20+ years of relationship with TurboTax. :(
The only software I could find supporting 8997 in 2019 is TaxAct (though it's not yet available). Sadly they don't support MacOS.
To request a TurboTax refund (as they don't support OZs) the link is here. https://support.turbotax.intuit.com/forms/refund-request.jsp. I had 15+years as a TurboTax user, very disappointed to be going elsewhere.
I am requesting a refund. Like many TT users, I have been using TT for 20+ Years. Very disappointed about level of support we get from TT regarding this topic. If TaxAct works, I am going to give it a try.
I am generally disappointed with Intuit. I am a Quicken user for 20+ years too and they now want me to subscribe to the sofrware and pay an annual fee so I put my data in the cloud... time to switch.
I think the TurboTax support for the highest level of their software referenced in other posts may be Lacerte, which isn't really available to the average user (need an EFIN to use and file).
I came to the same conclusion to give TaxAct a try this year. However, the online version doesn't seem to support Opportunity Zone Funds. The download version is supposed to support this, but I'm hesitant to spend $100+ to try it. I've also tried to call TaxAct multiple times to get clarification, but the wait times are normally 1.5+ hours. I also sent an e-mail asking for clarification over a week ago, and no response. Not very reassuring, but might be the only way to file this year without getting a CPA.
I also got an estimate from E&Y (I think they call it TaxChat). The fee was $2,500, but included about 25 K-1s, so it might be cheaper for many. The only issue is they make you sign a disclosure that your information can be released to other E&Y entities around the world, specifically India. So basically they are offshoring the handling of these returns. Might be a good option to consider, but not 100% confident even they will know how to handle Opportunity Zone Fund investments.
Thanks to everyone who is sharing insight into this process, even though it seems like it would be very easy to make a few updates to calculations and forms for all tax software programs to support Opportunity Zone Fund investments.
@Golfdiva We here in the Turbo Real Money Talk community cannot initiate refunds. Go to the following FAQ for instructions to get a refund under the TurboTax Satisfaction Guarantee.
Our TurboTax Satisfaction Guaranteed refund policy