Yes, assuming that all other requirements are met, an investor can purchase a QOF interest from a person other than the QOF.
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Do secondary purchases of QOF interests count as eligible interest for deferral?
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Yes, they do; the IRS regulations specifically allow this.
Yes. According to Reg.1.1400Z2(a)-1(c)(5)(iii), a person who purchases an eligible interest in a QOF from another taxpayer is able to make a deferral election with respect to their eligible gain and qualify for the tax incentives, provided that all of the requirements of section 1400Z–2(a)(1) and the section 1400Z–2 regulations for making a valid deferral election with respect to that investment are otherwise satisfied with respect to such acquisition. Interestingly, it does not matter if the QOF interest acquired was currently subject to a valid deferral election. All that matters is the QOF interest is an “eligible interest” in the QOF, which is an equity interest issued by a QOF. It is also important to note that you will be required to hold the QOF interest for 10 years from the date you personally acquired the QOF interest, in order to qualify for tax free growth on your QOF interest.
Yes, assuming that all other requirements are met, an investor can purchase a QOF interest from a person other than the QOF.
Yes, if all requirements are met.
The final regulations allow for what will essentially be a secondary market for QOF investments.
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