Qualified Opportunity
Zone Funds

Putting economic development first

Qualified Opportunity Zone Funds (QOF’s) enjoy a powerful combination of tax advantages including tax deferral, tax reduction and tax elimination. Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act.

Qualified Opportunity Zones

Spurring Economic Develpment and Job Creation

“We want all Americans to experience the dynamic opportunities being generated by President Trump’s economic policies. We anticipate that $100 billion in private capital will be dedicated towards creating jobs and economic development in Opportunity Zones. This incentive will foster economic revitalization and promote sustainable economic growth, which was a major goal of the Tax Cuts and Jobs Act”. US Dept. of Treasury, Steven T. Mnuchin Secretary of the Treasury, October 19, 2018.

Sweeping Legislation

The “Investing in Opportunity Act” included in the Tax Cuts and Jobs Act, passed in December 2017, introduced an innovative way to stimulate private investment in low income communities. The program rewards investors with significant tax savings for their commitment of long-term investment capital.
Each state governor was provided the opportunity to select up to 25 percent of the Qualified Opportunity Zones (“QOZ”) in their jurisdictions to develop economically depressed areas. To qualify, the area needed to meet certain low-income requirements including a higher than 20 percent poverty rate or a prevailing median family income less than 80 percent of the metropolitan median family income, based upon the most recent census tract data (2010).
In total, over 8,700 QOZs, home to more than 35 million Americans, were designated in 50 states, Washington D.C., and U.S. territories. In the aggregate, the designated QOZs, as certified by the Treasury Department, manifest an average poverty rate of 31 percent and a median family income of 59 percent relative to its applicable area. Approximately 75 percent of QOZs are located within metropolitan areas.

US Dept of Treasury, Steven T. Mnuchin Secretary of the Treasury, October 19, 2018

Tax Advantages

Potential tax benefits of QOF investment.

QOF investors access a powerful suite of tax incentives including capital gains tax deferral, a step up in basis and tax free growth. If an investor sells any asset that generates a capital gain and has invested an equal or lesser amount in a QOF within 180 days, they could enjoy the following benefits:

Tax free growth

Once invested in a Qualified Opportunity Fund, any capital gains tax on realized appreciation in the QOF will be tax free provided that the investor's holding period reaches ten years. The Qualified Opportunity Zone legislation was designed to incentive private sector investment in distressed communities.

Tax reduction

The taxable gain is reduced by ten percent, with an additional five percent reduction if the investment is held for a seven year period. In order to qualify for the additional five percent gain reduction, the QOF investment must have been made in the 2019 tax year.

Tax deferral

The initial capital gain tax from the sale of any asset, where the equal or lesser amount is invested in a QOF within 180 days, can be deferred. Investors are not required to invest the basis from the original investment in order to receive the deferral benefit.

QOZ Investment Timeline

Understanding the three tax benefits.

QOZ Investment Comparison

Scenario planning Qualified Opportunity Funds.

Consider the risks

Qualified Opportunity Funds also carry risks.

QOF investments involve substantial risk. It's important to understand the specific risks associated with a Qualified Opportunity Fund investment before you make investment decisions. QOF investments involve complicated tax concepts, reporting and tracking requirements which should be evaluated in conjunction with qualified tax, legal and financial representation. Stax Capital does not provide tax guidance or advice.

Deferred Capital Gains.

Remember that Capital Gains tax will be due and payable in 2027. Investors must plan for this event .

Tax will be due.

Speculative investments.

Qualified Opportunity Funds are speculative in nature and heavily reliant on the assumptions used by investment sponsors which may prove to be inaccurate.

Risk is inherent.

Illiquid investment.

No public market currently exists and one is unlikely to develop. Selling an interest in a QOF may proved to be difficult or impossible.

Difficult to sell.

Real estate risks.

Investments in real estate are subject to various economic risks including among other things recession, inflation, supply and changing market demographics.

Understand real estate risks.

Potential returns

The amount and timing of QOF investment distributions are not guaranteed. There is no guarantee that investor will receive distributions or a return of capital.

No guarantees.

Economic risks

Disruptions in the financial markets and challenging economic conditions could adversely affect QOF investments.

Economic impact.

Tax Risks

Tax rules and guidelines for QOZ investing have not been finalized and subsequent changes to QOZ rules and guidelines may have material adverse consequences to QOF Funds and their investors.

Regulatory Risk

The regulatory framework governing QOZ investing is fluid and changes are ongoing. Subsequent changes to QOZ and QOF regulations may have material adverse consequences to QOF Funds and their investors.

QOZ Uncertainty

Qualified Opportunity Zone tax laws are new and untested and subject to substantial modifications which creates a high level of uncertainty. Changes to tax laws may have material adverse consequences to QOF Funds and their investors.

VIEW LIVE OFFERINGS

Browse unique investment strategies
available to our accredited clients

Completed Investments

Filter Investments :
Carter Mulit-family I
Primarily Southeast
Total Capital Placement
$200,000,000
Loan to value
65-75% LTV Target
1031 Eligible
no
Minimum Investment
$50,000
Type
Multi-Family
Structure
LLC
Multi-Family DST
Bedford, NH
Total Capital Placement
$31,453,687
Loan to value
53.12%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
SENIOR LIVING DST
Phoenix, AZ
Total Capital Placement
$53,544,255
Loan to value
All Cash Offering
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Seniors Housing
Structure
DST
MULTI-FAMILY DST
Lexington, KY
Total Capital Placement
$34,342,000
Loan to value
47.82%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
MULTI-FAMILY DST
Houston, TX
Total Capital Placement
$30,400,000
Loan to value
46.89%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
MULTI-FAMILY DST
Louisville, KY
Total Capital Placement
$32,850,000
Loan to value
53.89%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
MULTI-FAMILY DST
Nashville, TN
Total Capital Placement
$28,250,000
Loan to value
56.59%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
MULTI-FAMILY DST
Destin, FL
Total Capital Placement
$33,450,000
Loan to value
55.22%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
MULTI-FAMILY DST
TX, GA & NC
Total Capital Placement
$72,403,877
Loan to value
54.70%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
Multi-family DST
Augusta, GA
Total Capital Placement
$29,525,000
Loan to value
56.08%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
Multi-family DST
Houston, TX
Total Capital Placement
$35,825,000
Loan to value
47.53%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST
Multi-family DST
Houston, TX
Total Capital Placement
$35,825,000
Loan to value
47.53%
1031 Eligible
Yes
Minimum Investment
25k Cash - 100k Exchange
Type
Multi-Family
Structure
DST

VIEW COMPLETED OFFERINGS

Browse all completed investments

VIEW LIVE OFFERINGS

Browse Live investment strategies