On May 14, MFA submitted a comment letter to Treasury and the IRS in response to their proposed rules on qualified opportunity funds. In the letter, MFA asked Treasury and the IRS to amend the proposed language that would disqualify all capital gains from section 1256 contracts (e.g., futures contracts, non-equity options, foreign currency contracts) if a taxpayer has any 1256 contract that is part of an offsetting-positions (hedged) transaction when any other position in that transaction was not a section 1256 contract. MFA suggested that the rule should only disqualify capital gains from the type of section 1256 contract described, not all section 1256 contracts. The letter also requested Treasury and the IRS to amend the proposed language that would disqualify capital gain from a position that is or has been part of an offsetting-positions transaction. MFA suggested Treasury and the IRS either remove the language “or has been” from the rule or to limit that language only to situations where there was an offsetting position after enactment of the Tax Cuts and Jobs Act. Finally, the letter requested Treasury and the IRS to amend the proposed rules to permit investors to invest in aggregator or feeder funds, subject to two conditions to address anti-abuse conditions. The suggested amendment would require the aggregator or feeder fund to invest only in underlying funds that are QOFs and would require the aggregator or feeder fund to meet the 90 percent asset test itself, on a look-through basis.