Opportunity Zone Funds for Tax Year 2019

[srivenkat]

Many thanks for the tips/info. I went thru the thread and as of today, TaxAct-Online seems to be working a little differently and below are the simple steps:

1. Goto Federal->Income->Capital gains and losses
2. Click on "Review" for Form 8949.
3. Enter capital gains entries as usua.
4. Add a separate entry by clicking on "Add Another sale"
5. For "Term and Type" select either C (for short-term gain deferral) or F (for Long-term gain deferral). If anything else is selected "Z" code will NOT be available in the drop down on the next step.
6. Enter value for 1a "Description of Investment or Property" as "x% INTEREST in [name of QOF here without brackets]" or "x SHARES in [name of QOF here without brackets]"
7. Under "Other detais", click on "I need to make an adjustment". Right below that, 2 new fields will appear. Enter amount being deferred (as a negative as in -100,000 for example) and select Z from the dropdown.
8. Click Continue and again Continue on the next page.
9. TaxAct will ask for the EIN of the QOF. Enter it and continue thru the next 2 screens.
10. That's it; TaxAct will automatically create the entries in Form 8949 and generate Form 8997 and reflect the deferral in Schedule D.

One thing I have yet to figure out is that the generated Form 8997 is shown with Part II filled out but not Part IV. Would be grateful for tips on how to fix this.

[IggyL]

@srivenkat 

Why would it matter to members of this community how to do it in a competing product? We would much rather see Intuit adding support for it in TurboTax. 

[srivenkat]

You need to select C (short-term) or F (long-term) in the "Term and Type" field and then Z will appear in the dropdown under "Other details", once you click on "I need to make an adjustment".

[Lao3]

I sold rental real estate properties in years 2019 and 2022 and invested proceeds in QOF in both occasions.  I was using TurboTax to prepare my 2022 Income Tax Report and could not complete due to TT not supporting Form 8997.  I decided going to Intuit ProConnect Tax Online (PTO) to complete my 2022 Tax Return. 

I purchased PTO with one individual tax return. My Tax Return can not be e-filed. Since I'm not a IRS approved preparer, I can only do paper filing.  At this moment I'm waiting for PTO manually (because I'm a Mac user) convert my 2021 Return in TT  into PTO.   If you're a PC user, it will be easier.  I will begin preparing my 2022 Return in PTO once I have my previous year return ready.

[bmk]

I’m sure we would all be happy if TT included OZ filing capability. But since it doesn’t, it seems this discussion on where to go for OZ supported filing is of value to the community members. 

[DXS]

I still highly recommend TaxActOnline for QOZ stuff.  However, you really must be somewhat familiar with tax code to use TaxActOnline. It "ain't written for six year olds."  But if you are investing in a QOZ stuff you probably are familiar. 

My Form 8997 was fine, no questions from IRS on it. 

I do have one "nit pick" with TaxAct Online.  It won't let you do a Form 2210 (Underpayment of Estimated Tax) if you have a refund coming.  You have to "trick" the  web site by removing all tax payments from all sources (withheld on W-2 or estimated) until you show NO tax payments then it will allow you to bring it up.   Once you have started the Form 2210, you can go back and put the tax payments back in to the W-2 and other estimated.  I called up TaxAct and told them this was a "flaw" and they swore up and down that if you are getting a refund you do not need to fill out a Form 2210.  Well, I have numerous letters and documents from arguing this previously with the IRS.  It doesn't matter whether or not you are getting a refund.  If you made estimated tax payments either manually via Form 1040-ES or online on IRS web site, then you MUST do a Form 2210.  Even if you overpaid and are getting a refund. 

One more nitpick on TaxAct Online.  I filed a Form 1040X (Amendment) on TaxAct (no charge YAY!!!) for an additional $700 of income and paid the $120 that was calculated as tax owed.  IRS came back and said I owed $1500.  Right.  200% tax rate. Nope.  I argued and argued and finally found a smart IRS agent who said that on my Form 1040X I failed to disclose that the QDCGTW (Qualified Dividends Capital Gains Tax Worksheet) is to be applied as opposed to "tax tables."  It was applied on my original return but I failed to disclose in on 1040X.  WELL I THOUGHT IT WOULD CARRY OVER TO AN AMENDMENT!  I called TaxAct Online about this, and they didn't seem to care.  I still feel I should not have had to disclose that on Form 1040X as it was disclosed on original return.  I do blame TaxAct on this.

Like I said, if you use TaxAct, you need to be somewhat familiar with tax law because it ain't written at a six year old level. 

[srivenkat]

One thing I have yet to figure out is that the TaxActOnline generated Form 8997 is shown with only Part II filled out but not Part IV. Did you run into this as well and if so would be grateful for any tips on how to fix this. Thanks.

[DXS]

I did not have this problem.  Part IV will fill out automatically depending on what you enter on other forms.  It waits to see if you have made additional investments.  But who knows.