Does my investment qualify
and fit my goals?

Document the taxpayer, gain source, recognized gain amount, and relevant date. Sale proceeds and eligible gain are different. Pass-through, installment, and other gains need their own analysis.

Have the starting date and deadline confirmed for your gain type. Use calendar days, not six calendar months. A subscription promise alone is not the qualifying investment.

Confirm the QOF’s effective month, entity classification, intended investment date, and the equity interest you receive. A direct project investment does not automatically obtain investor-level OZ treatment.

Review the developer, designation, budget, leverage, fees, waterfall, distribution assumptions, risks, and decision rights. Tax incentives do not establish investment suitability.

Track the eligible-gain investment separately from any additional nonqualifying equity. Ordinary capital and service-based promote interests do not automatically receive the same OZ treatment.

For a qualifying post-2026 investment, recognition is generally at five years or an earlier inclusion event. Arrange tax liquidity even if the project has not made distributions.

Consider liquidity needs and the possible ten-year appreciation benefit. Ten years is a benefit threshold, not a universal legal lockup; the investment documents govern liquidity and transfers.

Confirm who prepares your elections and annual reporting, retains supporting records, and reviews distributions, transfers, and exit treatment. Consider applicable state taxes separately.