A: Any taxpaying individual or entity can create an Opportunity Fund, through a self-certification process. A form (expected to be released in the summer of 2018) is submitted with the taxpayer’s federal income tax return for the taxable year.

What is Opportunity Zone property?

Opportunity Zones are areas that have seen significant economic distress. Created as part of the 2017 Tax Cuts and Jobs Act (TCJA), Qualified Opportunity Zones (QOZ) are meant to spur investment in areas that have struggled economically by setting up special tax treatment for investors in these areas.

How does a QOF work?

Within 180 days, Investor invests an amount equal to the amount of gain Investor desires to be deferred in a QOF. If Investor holds its QOF interest for five years, Investor will not be subject to US federal income tax on 10% of the deferred gain.

How do I self certify a qualified Opportunity fund?

The fund can self-certify by timely filing, including extensions, Form 8996 annually with the appropriate income tax return. The purpose of this form is to compute the ratio of qualified opportunity zone property to total assets in the fund.

Are opportunity zones A Good investment?

Financial experts recommend you bring significant capital gains to the table when investing in opportunity zones. If you’re not there yet, there may be better investment strategies for you. Like most investments, opportunity funds will perform best if you choose wisely.

Can I contribute property to a Qof?

A21. Yes. You can transfer property other than cash to a QOF. However, a transfer of non-cash property may result in only part of the investment being a qualifying investment (that is, only part of the investment can benefit from the QOZ tax incentives).

How to form your own Qualified Opportunity Zone fund?

Click here to listen to Part 2: How to Form Your Own Qualified Opportunity Zone Business. Step-by-step how-to for forming a Qualified Opportunity Fund (QOF). The biggest considerations when forming a Qualified Opportunity Fund. Who can form a Qualified Opportunity Fund, and why someone might want to do so.

How are real estate developers can use Opportunity Zone funds?

The Code states that the “original use” of the property must commence with the qualified opportunity fund, or the qualified opportunity fund must substantially improve the property. This would generally require that a property not be completed prior to investment by Opportunity Zone investors.

How to invest in an OPP zone fund?

Self-Certify or Locate an Opportunity Zone Fund. With your eyes set on a target property or properties, you have to make sure you have access to a Qualified Opportunity Zone Fund in that market. One option is to self-certify as an Opp Zone Fund. That can be done by filing the IRS 8996 form and submitting with your taxes.

What are the requirements for an opportunity fund?

Some of the key compliance issues for a Qualified Opportunity Fund — substantial improvement test, 90% asset test at the fund level, 70% asset test at the QOZB level, gross income test, working capital safe harbor documentation, and services performed test.