invest in a Qualified opportunity fund

So, you heard about the exciting new investing options created by Opportunity Zones. Not only do these allow you to help others living in an underdeveloped community to boost the local economy, but they also offer you the chance to eliminate paying capital gains tax on the growth of your investment—not to mention other potential tax benefits. Yes, you read that right. You can eliminate—as in, completely eliminate—capital gain taxes.

Eliminating taxes on your capital gains is definitely something to get excited about! That’s why many investors, like you, are eager to learn all about Opportunity Zones. Let’s say you’ve made the decision to reinvest your upcoming capital gains into an Opportunity Fund, but aren’t quite sure how to start. Well, we’re going to show you how.

How to invest in a Qualified Opportunity Zone?

To start investing in an Opportunity Zone, first focus on communication with a fund manager to time it right. That’s right, you’ll need to find a fund manager. A fund manager might include a partnership or corporation that has established a Qualified Opportunity Fund (QOF)—an investment vehicle that uses the capital gains you received from another investment to fund the development of Opportunity Zone properties or businesses.

What’s the Quickest Way to Get Started?

The absolute benefits of investing in an Opportunity Zone is to contact local real estate investment firms and/or real estate developers. Ask if you could join them in a partnership format that is simply self-certifying at the end of the year. Of course, choosing a partnership route would depend on the size of the project you’d like to invest in, and the amount of capital gain you have. 

Why is a partnership route the quickest way to get started? Well, you wouldn’t have to go through the time-consuming procedures of forming a Private Placement Memorandum (PPM) that has to be registered with the U.S. Securities and Exchange Commission (SEC). Instead, you’d simply own interest in a partnership. The operating agreement would establish the terms of the deal and how long you expect to stay invested (also known as your “investment horizon”).

Select an Opportunity Zone That’s Familiar to You 

The best way to select a QOF is to make sure you’re familiar with the Opportunity fund that it’s funding. In other words, invest in what you know—your local market. This is especially great if you live near a hot market. 

For example, if you’re local to the Nashville area like us, then take a look at the Tennessee Opportunity Zones closest to you. Nashville happens to be one of the hottest markets in the nation. In fact, according to, Nashville recently ranked among the top 10 best real estate markets for homebuyers in the U.S.—for the lowest price growth year over year, and 10% more inventory growth than any other market in the nation.1 If you hear reports like that in an Opportunity Zone near you, it’s a great sign that the timing may be right to invest in a QOF in that area. 

Invest Your Capital Gains

After you select a QOF that’s invested in an area that’s familiar to you, you’ll also need to have recently received capital gains on a previous investment. Your investment in a QOF must be capital gains! This is great news because if you sold a real estate investment property, you can delay the taxes on the appreciation amount by investing it into the QOF you select.

How to Start, Step-By-Step Guide

Okay, now let’s walk through each step you’d have to take to get the maximum benefits provided by an Opportunity Zone. 

  1. Sell an asset and use your capital gain to reinvest in a local Opportunity Zone. You can do this at any time until the year 2048! (The deadline isn’t just until December 2018 or 2019.)
  2. Make an election on your tax filing to show that you’re rolling over your capital gain into a Qualified Opportunity Fund. You have 180 days from your sale event to do this.
  3. Pay deferred capital gain taxes by December 2026, at the latest. (The deferral benefit is only good until then!) If you stay invested for 5 years, you’ll receive a 10% reduction on the initial tax basis of the capital gain invested. If you stay invested for 7 years or longer, you’ll receive an additional 5% reduction.
  4. Stay invested for 10 years or longer and the Opportunity Fund allows you to completely eliminate capital gain taxes on the appreciation of your investment!

And there you have it! Not only will your investment be helping grow the economy in a local area. It will also give you the chance to build wealth like never before.

Invest in a Qualified Opportunity Fund Today

If you’re excited about boosting the local economy while eliminating your capital gain taxes, then it’s time for you to start investing in a QOF! All you have to do is connect with our team of investment professionals.

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