What happens with investors who have already invested into the fund?
You can make a retroactive election on Form 8996, as long as the election is effective during the corresponding taxable year. But if you elect to start Qualified Opportunity Fund (QOF) status on a date after the investments come in, the prior investments cannot qualify for Opportunity Zone benefits.
The key here is that a fund elects Qualified Opportunity Fund (QOF) status by filing a Form 8996 for any month in a taxable year by the due date (including extensions) for the fund's tax return for that year. This means that a partnership formed in January 2021 can wait until Sept. 15, 2022 to elect to be treated as a QOF effective as of January 2021. So any investors who invest between January 2021 and Sept.15, 2022, can still be treated as having made a qualifying investment.
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