The threshold for QOFs is 10%, so you do have some breathing room. For QOZBs, it could be as high as 30%, but that presumes you meet some other compliance requirements.
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What does a “non-qualified” asset in a QOF or QOZB mean?
Can I lose my OZ classification if I have non-qualified assets in my fund? Is there a minimum level?
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A QOF must maintain at least 90% of its assets invested in QOZP which can be stock or participation in a QOZB or in QOZBP. The regulations establish the requirements for tangible property to be QOZBP, mainly acquired from unrelated parties after Dec. 31, 2017, with original use in an OZ and used in an active trade or business in an OZ during at least 90% of the holding period by the QOF or QOZB.
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