If you're referring to reinvestment of the sale of QOZ property, the regulations peg this period at 12 months.
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What is a reasonable reinvestment period for a Qualified Opportunity Fund?
What is a reasonable reinvestment period for a Qualified Opportunity Fund?
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The regulations give you 12 months to reinvest. The fund from the sale of Opportunity Zone assets or businesses without resetting the 10-year clock.
I recommend 12 months.
The second tranche of guidelines says a fund has 12 months to reinvest interim gains.
The ideal target would be a minimum of a 10-year investment, as that would provide the most benefits, but obviously the time period will be subject to the needs of the investor. An investment in a Qualified Opportunity Fund will receive a deferral of capital gains in the year in which the investment is made. If the investment in the QOF is held for at least five years, it will see an increase in the original basis of 10%, while those held for at least seven years will see an increase in their base of 15%. But if the investment is held for at least 10 years, the added benefit is that any new gains made from the investment in the QOF are also entirely excluded. So while shorter periods of time still provide benefits, the greatest impact comes from holding investments for at least 10 years.
To get the maximum benefit, the deferred capital gains have to be invested for 10 years in a QOF or biz.
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