Will turbotax 2019 support deferring capital gain by investing in a qualified opportunity zone

[MJ10]

I have made some investments into qualified opportunity zones from my capital gains in 2019.  Will Turbotax 2019 support deferring the capital gains as a result of investment in opportunity zone?

[Critter]

This has not been directly supported in the past ... you had to use the Downloaded/CD version and make the entry directly in the FORMS mode.  Don't know what it will be in the 2019 program ... may be way too early for that portion of the program to be operational ... we will see if someone chimes in today.  

[Critter]

Here was one of the discussions last year : https://ttlc.intuit.com/community/taxes/discussion/how-do-i-elect-qualified-opportunity-zone-deferra...

[davidmgold]

I wish TurboTax would chime in on this and simply tell the community if they are planning to include this capability or not!  I had 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.  

[DavidD66]

Qualified Opportunity Funds deferral of eligible gains via investment into a Qualified Opportunity Fund (QO Fund) is not supported in TurboTax.

[BillR3]

Will it be?

If Turbo tax Premier says it supports real estate investors and rental property what gives. 

[DavidD66]

Perhaps it will at some point in the future, but as of now TurboTax doesn't support qualified opportunity zone capital gain deferrals and I'm not aware of any imminent plans to so.

[wjbnole · Accepted solution]

I was told, after talking with a TT CPA, that schedule D gain deferrals due to a qualified opportunity zone investment is not yet supported.  H&R Block told me they support the transaction in their top level desktop program.

I overrode TT on 8949 by putting an X in column F and the amount to defer (as a negative) in column g., in accordance with IRS form guidance.  The correct (lower) capital gain carries through on the 1040.

When running the TT reviews, the override entries show up as errors.

The return must be mailed (not filed electronically) due to the errors (I think). 

I assume TT won't be tracking the deferral for its ultimate recognition.

Sad that TT doesn't support the deferral as allowed by the IRS.

[AJ Kimpel]

I am disappointed that Turbo Tax is not supporting Qualified Opportunity Zones. I always file with Turbo Tax and I bought 2019 again and find out it doesn't support it. Why? The program should cover all areas of the tax laws and a person buying the program makes that assumption. Can Turbo Tax reconsider and add this to the program for 2019 tax year?

[KrisD15]

We will forward your comment, but no, the software will not be updated to support Qualifying Opportunity Zones for tax year 2019. 

[MJ10]

I got the premium version of H&R Block tax software.  Then chatted with the tax pro about this topic.  They too told me to manually update the 8949 form and then print and mail manually.  That’s disappointing.  I was hoping to e file like I have been for so many years.  Any other alternatives available?

[JeffNV]

Thanks for chiming in with clarity -- but please add my voice to the "dismayed and disappointed" group of long time TT users.  

I might understand why it wasn't supported in the first year, but not by 2019 -- and with so many OZ options out there now to defer 2019 gains. 

It's a BIG MISS for TT -- gotta be thousands of us out here who expect to use it. 

[JeffNV]

I was able to get a QOF transaction into Form 8949 by adding it as a separate "additional sale" (unreported) in 1099B Investment Income -- as a negative amount.

This same thing is suggested elsewhere in this thread, but the particulars of how to do it in TT were not provided.  The "negative amount" reporting is also suggested on the IRS guidance for form 8949 at https://www.irs.gov/pub/irs-pdf/i8949.pdf. (look at the bottom right of page 9 / top of page 10 of the pdf).   

The rest of this is my own personal "hack" -- I am NOT a CPA or professional tax person - so take the advice as such....

I entered the transaction date to match the long term gain being deferred.  There is no guidance for how to do this in TT, as the IRS instructions suggest you don't need to track the deferral to a specific gain - only if it's deferring a long or short term gain - box C or F.  I couldn't figure out any other way to "force" the transaction in TT into long term (column F) except for back dating it b/c you have to provide some date for it in the software (can't leave it blank).

I had to go to the forms to enter the proper name and account number for the QOF provider, which then allowed me to edit it in the interview.

The form looks right after all of this -- but the IRS will be the ultimate judge of it.

[ThomasM125]

It may be that because of the complexity of the transaction the software cannot be standardized to the point where it would be accurate across a broad based population of users. I believe this is an instance where the tax law is simply too complicated to be reduced to a few questions and answers. 

It appears that is why both TurboTax and H&R Block (and probably other tax prep programs) require manual entries to process these transactions.

[lori58sf]

with tax date extended to 7/15/2020, it is a shame that TT is still not support it...  Per IRS guideline, it is not complicated to elect OQF etc.  So I do not understand why TT is not including it now that TT has time to implement the feature.    One of key selling points of TT is e-filing.   Without a min support of this feature which is not new for tax year 2019 is just a bad move by TT.  Next year, we will all need to manually reenter info again when transferring 2019 tax year file!  it is just not user friendly!  TT I hope you reading the thread and add the feature...it is only mid May now.