Is there any way to structure the fund to get around that?
Yes, a Qualified Opportunity Fund (QOF) (or its owners, if the QOF is taxed as a partnership or S corporation) will be liable for tax on gains that it recognizes. The only way that comes to mind to avoid that tax is to dispose of the asset responsible for the gain in a like-kind exchange, if available.
Yes, it's liable for tax on its regular income. No, there is not a practical way to structure around this reality.
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