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A 10-Step Roadmap to Selecting an Opportunity Zone Fund

Help client take advantage of this opportunity while minimizing the likelihood of an adverse outcome.

Qualified Opportunity Zone Funds offer a novel, tax-advantaged opportunity for HNW investors. However, because they’re so new, selecting QOZFs that have sound fundamentals and investor safeguards is important.

Designed to revitalize economically challenged, low-income communities, QOZs use private investments rather than taxpayer dollars.

The upside for individual investors is clear; they can defer and reduce capital gains taxes on a wide variety of legacy assets used as a source of funding and exclude capital gains taxes altogether on new QOZ investments. The challenge for investors, however, lies in selecting an appropriate QOZF in which underlying assets will not only generate satisfactory returns but will also meet regulatory requirements necessary to accrue tax benefits.

After the new tax law established QOZs, I received dozens of unsolicited, half-baked proposals from would-be QOZF sponsors, many of whom lacked the necessary real estate experience.  A desirable QOZF has a number of hallmarks. Here’s a 10-step roadmap to selecting a QOZF.

Paul Platkin is Chief Investment Officer, Hillview Capital Advisors LLC.

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