Qualified Opportunity Funds | OTS Series
Thursday, October 28, 2021

Since coming into effect in January 2018, Subchapter Z of the US Tax Code—also known as the opportunity zone provisions—has enabled investors to pour billions of dollars into a broad array of businesses, from real estate development companies to tech startups. Investments in qualified opportunity funds (QOFs) offer a number of distinct tax benefits, not the least of which is reduced capital gains tax liability. But the rules governing these investments are quirky, perplexing and—in some cases—severely restrictive.

In the following series of articles, we discuss the benefits of investing in a QOF, offer a detailed analysis of the law surrounding the opportunity zone provisions, provide case studies that more closely examine industry-specific structuring of opportunity zones and more.


  1. THE BENEFITS OF INVESTING IN A QOF – Why should investors consider investing in qualified opportunity funds (QOFs)? The answer to this question can help individual and institutional investors make more effective decisions when deciding if, how and when they should pursue opportunities that, assuming certain conditions are met, can offer significant tax advantages. In this first of our series of articles on QOFs, we explore the many benefits (and some of the hazards) of investing in this unique investment vehicle.

  2. HOW TO INVEST IN A QOF – You’ve decided that the benefits of qualified opportunity funds (QOFs) make this an attractive investment vehicle. But how do you go about identifying and investing in a QOF? This article discusses—from an investor’s perspective—the requirements for making an eligible investment in a QOF.

  3. WHAT IS A QOF? – How does a qualified opportunity fund actually get qualified as a QOF? Failure to satisfy the US Department of the Treasury’s definition of a QOF can severely restrict the fund’s ability to attract capital. In this third of our series of articles on QOFs, we discuss—from a fund’s perspective—the mechanics of qualifying the fund as a qualified opportunity fund.

  4. BASICS OF QOF INVESTING: WHAT IS A QOZB? – While qualified opportunity zone (QOZ) property must make up at least 90% of the property of a qualified opportunity fund (QOF), only 70% of the tangible property of a qualified opportunity zone business (QOZB) need be QOZ property. While this might sound confusing on its face, this distinction can help a QOF maintain flexibility and obtain specific tax benefits. In this fourth of our series of articles on QOFs, we discuss the entities that qualify as QOZBs and whose interests qualify as QOZ partnership interests or QOZ stock.



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