Capitol Hill / File photo
Regulators not around to clarify urban real-estate tax breaks, frustrating funds that are raising hundreds of millions of dollars
By Peter Grant | The Wall Street Journal
The government shutdown is putting the brakes on scores of real-estate investors and developers who have been raising hundreds of millions of dollars to take advantage of what could be one of the most attractive tax breaks in years.
Businesses had been hoping to move quickly this year to take advantage of the lucrative opportunity-zone provisions of the 2017 tax overhaul law. They give investors in nearly 9,000 lower-income areas throughout the country both a deferral on current capital-gains taxes and an exemption on gains realized on investments held for at least 10 years.
But most of these investors say that, for them to proceed with investments, they need the Treasury Department to finalize guidance on exactly how the tax breaks will work. That is not likely to happen as long as most of the government stays shut.
“Although the Treasury Department’s second round of guidance regarding opportunity zones has not yet been released and will not likely be released for several weeks, many investors and opportunity funds are moving forward with their investments, while others will hold back until final guidance is issued.”
