Opportunity Zone Funds for Tax Year 2019

[gdgorski]

Hi, will Turbo Tax 2021 support capital gain deferral for opportunity zone investment with e-file?

gerard

[rjs]

@gdgorski 

TurboTax 2021 does not support deferring gain by investing in Qualified Opportunity Zones, and it is not going to be supported. It is not supported for e-filing or for filing by mail. TurboTax 2021 does not support codes Y and Z on Form 8949, nor does it support Form 8997, and they are not going to be supported. If you want to defer capital gain by investing in Qualified Opportunity Zones, you cannot use TurboTax to file your tax return.

[tiger206]

I have been using Turbotax for the last 2 years despite having new QOZ investments each year.  I do have to file by mail and cannot file electronically.  I manually override on form 8949 to enter my code Z. I also have to fill in 8997 manually outside of Turbotax. 

This isnt too unusual ; I have other forms I need to file each year that are not supported by Turbotax (for example QEF election on 8621), but it does take some care to ensure you are integrating those forms and amounts that must flow to your turbotax return correctly.  I didnt find the QOZ stuff to be too painful.

It's certainly less than optimal, but you can still use Turbotax in some fashion.  I dont have a better solution, so that's what I am doing.

[rjs]

Keep in mind that a manual override voids the TurboTax Accurate Calculation Guarantee.

[tcdowd13]

For those that mentioned using Taxact for the QOZ 8997 and 8949 filing.  Were you able to enter code "Z" on form 8949?  I don't see it as an option on the drop down box.  Did you file e-file?

[christec]

You can file online if you want to avoid mailing your return.  You can fill out your forms at:  Free File Fillable Forms thru the IRS

[christec]

You will not be able to efile, but you can override and use the correct codes.  TT even figures it correctly....they just don't support it.  You can file online if you want to avoid mailing your return.  You can fill out your forms at:  Free File Fillable Forms thru the IRS.

[DXS]

I used TaxAct.  They did not make it easy.  You have to follow the software in a very specific order. If I remember, the software put the Z in for you if you answered questions about a stock sale a certain way. I'm pretty knowledgeable of tax law, but it was hard for me to get it to work.  You have to do things in a certain order. I got it right, but it was cumbersome.  

[tcdowd13]

Thanks, I'll keep trying.

[QOZ]

Good afternoon, were you able to figure out how to input code Z in TA?  I'm running into the same situation... I'm using the online version.  

thank you kindly!  

[DXS]

I'm sorry I don't remember. I just remember it has to be done in a certain order.  I think..... when you input your capital gain, there is some sort of drop down menu where you SELECT the Z and you have to enter how much of that gain went to a QOZ.  Mine was a portion of four different gains, so I had to do this on four capital gain entries for the Form 8949.  I think you have to do the 8949 and once you find the drop down menu where you can click on the Z, it will generate the Form 8997.  Memory is a bit fuzzy.... All I know is they didn't make it easy. I'm an Accountant and it was hard for me to figure it out.  I didn't invest this year in a QOZ but my carry forward 8997 was generated.  I will try to play with my current form and do a "pretend" entry to see if I can remember how it was done.

[Anonymous_]

Note that @QOZ is using the online version @DXS 

[DXS]

So did I!  I used the online version.

[Anonymous_]

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@DXS wrote:

So did I!  I used the online version.

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Glad to hear that you got it to work for your purposes.

[tcdowd13]

I was not and have 2 conversations with Tax Act reps.  They submitted a ticket and supposed to follow up with me.