My QOF will be a two member LLC both investing qualified CG. The QOZB will be a two-member LLC with the QOF being a 99.9% owner and myself a .1% owner. The QOF will be depositing all of the capital. How does my separate .1% ownership work at tax time both in the course of ordinary income the QOZB generates and 10 years down the road when assets are sold to generate tax-free gains?
Your 0.1% interest in the qualified opportunity zone business (QOZB) will be treated like any other interest in a partnership that is not a QOZB -- you will pick up your share of ordinary income and you will not receive a basis bump at a sale 10 years down the road (so that you will be taxable on all gain at that time).
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