1.) Deferral of Capital Gains:

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Eligible taxpayer receives a temporary deferral of any eligible gains invested into a QOF as long as the gains are invested within the 180 day period and the taxpayer makes the gain-deferral election.

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2.) Elimination of a Portion of Deferred Gains After 5 and 7 Years:

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If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain.  If held for more than 7 years, the 10% becomes 15%.

 

 

3.) No Gain Tax Upon Sale or Exchange of QOF after 10th Anniversary of Investment:

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Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged