What is a Qualified opportunity fund?
A Qualified Opportunity Fund (QOF) is an investment vehicle organized as a Corporation or Partnership that holds at least 90% of its assets in Qualified opportunity zone property. QOFs serve as the mechanism through which investors can defer capital gains taxes by investing proceeds in designated economically distressed communities. These funds must be certified by the IRS and maintain ongoing compliance with strict regulatory requirements. Investors who contribute capital gains to QOFs within 180 days of realization can defer taxes until 2026 or sale. The funds work well alongside Tax loss harvesting strategies and Depreciation and amortization benefits for real estate investments. The Augusta rule can provide additional tax advantages when combined with opportunity zone real estate developments.
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