The federal Qualified Opportunity Zone (QOZ) program is by the far the most valuable and impactful tax program enacted in this century. The program was developed under the Obama Administration but finalized under the Trump Administration and had wide bi-partisan support since it is designed to infuse hundreds of billions of dollars into economically challenged communities. The program will yield significant tax benefits for both investors and communities across the country for the next three decades.
December 31st is a very critical date for investors and QOZ fund managers:
- Qualified Opportunity Funds (QOF) must be established and funded by December 31, 2019 in order for those investors to get the maximum benefits under this long-term investment program. This deadline exists since the OZ rules require an investor to hold their fund investment for at least seven years to obtain the maximum 15% reduction in the deferred tax gain that must be reported on December 31, 2026. Investments made after December 31st will not allow the full seven-year holding period – resulting in an additional 5% gain in 2026.
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