Will form 8997 QOZ investments be supported in the Turbo tax 2020 version

[Rittel42]

I am a long term TurboTax user and getting ready to do a QOZ investment and understand the form is not in TurboTax.  Will form 8997 QOZ investments be supported in the Turbo tax 2020 version?

[tagteam · Accepted solution]

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@Rittel42 wrote:

Will form 8997 QOZ investments be supported in the Turbo tax 2020 version?

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Nothing has been released concerning Form 8997 at this time. The 2020 program is still in the testing and development stage.

[what to do if 10-99 misc is wron]

Any update on 8997 forms for QOZ investement in Turbotax 2020.  I don't want to buy it if I don't know.

[tagteam]

The form is still in draft mode (see link below), but it is doubtful it will be included in TurboTax as it was not included in last year's products.

https://www.novoco.com/sites/default/files/atoms/files/irs-f8997-draft-102020.pdf

[macuser_22]

This is for 2019  but was the same for all prior years also and I have no reason to believe that TT will support it this year. I assume that this applies to the 8997 form also so I would not hold my breath waiting for it.

Calculations NOT supported by TurboTax.

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).

[dcolemanmv]

The form now appears to be finalized: 2020 Form 8997 (irs.gov)

Please add to Tt 2020.  Its a fill out form only and would avoid my having to file an amended return to include it.

Hope you can accomodate.

[tagteam]

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@dcolemanmv wrote:

The form now appears to be finalized: 2020 Form 8997 (irs.gov)

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@dcolemanmv TurboTax is not going to support Form 8997 nor the calculation(s) involved. 

I would suggest you look elsewhere if this is a deal-breaker for you.

[dcolemanmv]

CHAMP, Thanks very much for the prompt response. Disappointing for sure. I was specifically told by a TurboTax representative last fall over the phone that this form would be supported this year before I re-upped my subscription. I'd recommend anyone doing a QOZ investment consider TaxSlayer Pro which reportedly supports the form and QOZ deferrals.  But I can understand that there are not so many TurboTax users doing QOZ investments. It was a real pain to have to mail in my last year return. As I did not make new investments last year, I'm thinking I can electronically file my taxes this year then send in an amended return that adds the 8997 for required for reporting the next few years. D

[vanner]

Any update on the inclusion of Form 8997 into TurboTax 2020?

[tagteam]

@vanner 

Yes, it appears as if it will not be included.

[john_w]

I don't have any QOZ transactions for 2020 and was thinking the same thing as dcolemanmv -- eFile using TT 2020, then amend the return by sending the paper Form 8997 to the IRS afterwards.  

However, according to the IRS, you don't have to file an amended return for omitted forms:  "You also usually won’t have to file an amended return because you forgot to include forms, such as W-2s or schedules, when you filed — the IRS will normally request those forms from you."   That seems to mean no amended return is needed!

Here is the URL: https://www.irs.gov/newsroom/if-you-must-amend-your-return

As a 20+ year user of TT, I am very disappointed that TT does not support OZs.  

[stajuddin]

The instructions for form 8997 say it must be included with your timely filed return.  Not sure you can intend to omit a form.  Besides, the bigger issue is the Z deferral on form 8949.  I think it will prevent me/you from efiling the return, which is a huge pain.

I spoke to a rep at TT today and they chatted internally with a resource.  It was conveyed to me that it is "not known" if TT2021 (filings in 2022) will include support for 8949(z) or 8997.

I'm considering dumping TT this year.