How can I reinvest in another QOF without restarting the clock on my tax incentives?
It does not appear that you can transfer your interest in one QOF for an interest in another QOF, without restarting your holding period, unless the transfer results from a merger of the two QOFs and the resulting QOF qualifies as a QOF after the merger. Treasury Regulations Sections 1.1400Z2(b)-1(c)(6)(ii)(C)(2) and -1(c)(10)(i) provide the relevant support for QOFs that are partnerships and corporations, respectively.
You can try to merge the QOFs, which is allowed. Other than that, changing investments from one QOF to another restarts the clock in all cases.
You must be careful and trigger a recognition event. The regulations provide guidance in the case of mergers of funds.
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