Qualified Opportunity Fund

Deferred Taxes, Reduced Taxes, Zero Taxes

Tax Incentives

Under the Opportunity Zone program, an investor can defer capital gains tax on realized gains if the gains are invested in a qualified Opportunity Fund within 180 days of the sale.

Initially, the tax basis is deemed to be zero. However, if the Opportunity Fund investment is held for at least 5 years, the basis is increased to 10 percent of the deferred gain.

Holding the investment for at least 7 years, the basis is increased to 15 percent of the deferred gain.

Finally, if the Opportunity Fund investment is held past December 31, 2026, the investor will be deemed to realize the deferred capital gains as of December 31, 2026. In addition, will pay capital gains tax on the amount of recognized gains as of that date (determined as described above, with basis adjustments if applicable).

The basis is then adjusted to equal the amount of the original Opportunity Fund investment. Finally, if the investor holds the Opportunity Fund investment for at least 10 years, the basis is deemed to be the fair market value of the Opportunity Fund investment and no capital gains tax will apply to the appreciation on the Opportunity Fund investment.

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