Qualified Opportunity Funds
Maximize Your QOF Investments
The Qualified Opportunity Zone (QOZ) program, initially introduced by the Tax Cuts and Jobs Act of 2017, is designed to stimulate long-term private investment in economically distressed communities. This initiative offers tax incentives for investors who reinvest realized capital gains into designated low-income census tracts.
Benefits of Investing in Qualified Opportunity Funds
Qualified Opportunity Funds (QOFs) are the vehicle for investors to leverage the QOZ program. Benefits of investing in QOFs include:
Temporary Deferral of Capital Gains Tax
Reinvest eligible gains into a QOF to defer tax liability. For gains invested after December 31, 2026, the deferral period is now a rolling five years from the investment date.
Partial Basis Step-Up
Obtain a 10% basis step-up on deferred gains after holding your QOF investment for at least 5 years.
Tax-Free Growth
Potentially eliminate federal income tax on the appreciation of your QOF investment if held for at least 10 years, offering a powerful long-term wealth-building strategy.
To qualify as a QOF, an investment vehicle must be organized as a corporation or partnership for the purpose of investing in QOZ property (versus another QOF). 90% of its assets must be OOZ property, as measured on specific semi-annual testing dates.
Why Work with EisnerAmper on Your QOF Strategy
The complexities of the QOZ program, coupled with the ongoing need for compliance and tax planning, require experienced guidance. EisnerAmper’s dedicated team of QOF specialists and tax professionals provides comprehensive services to Qualified Opportunity Fund investors, including:
Tax Compliance and Planning
Beyond preparing returns, we work closely with clients on business and tax structuring designed to minimize federal, state and local income tax, withholdings, UBTI, ECI, FIRPTA, and other tax considerations. Our tax planning focuses on maximizing capital gain treatment and implementing various structures for funds, offering investors tax-efficient returns.
With EisnerAmper’s deep bench of professionals and access to robust fund resources, we can provide comprehensive support for Qualified Opportunity Funds.
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Michael Torhan
Michael Torhan is a Tax Partner in the Real Estate Services Group. He provides tax compliance and consulting services to clients in the real estate, hospitality, and financial services sectors.
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