top of page

Qualified Opportunity Zones

Construction Site View

Qualified Opportunity Zone (QOZ) Investments

 

Opportunity Zones were created under the 2017 tax reform bill to encourage long-term investment in designated low-income communities.

Investors can defer — and potentially reduce — capital gains taxes by reinvesting gains into Qualified Opportunity Funds (QOFs).

 

How QOZ Investing Works:

  1. You realize a capital gain (from stocks, property, a business sale, etc.).

  2. Within 180 days, you invest those gains into a QOF.

  3. If you hold the investment:

    • 5 years → partial tax reduction

    • 10 years → no capital gains tax on the new investment’s appreciation

 

What QOZ Funds Invest In:

  • Affordable and workforce housing

  • Community development projects

  • New business development

  • Real estate redevelopment

Funds must invest in designated Opportunity Zones across the country.

 

Benefits of Opportunity Zones:

  • Flexible tax deferral

  • Potential elimination of taxes on new gains

  • Encourages socially beneficial investments

  • Many projects include real estate development or improvement

 

Considerations and Risks:

  • Long-term hold requirements

  • Projects can be complex and development-heavy

  • Geographic concentration risk

  • Need careful due diligence on fund managers

bottom of page