Frequently Asked Questions

Background Questions

What is an Opportunity Zone?

In early 2018 the governors of each state selected the Opportunity Zones for their states from among the state’s economically disadvantaged census tracts.  You can see all the Opportunity Zones in the United States on this map.

What is an Opportunity Fund?

An Opportunity Fund receives money from investors, and in turn invests the money in Opportunity Zone Projects.  An Opportunity Fund might have one or many investors. And an Opportunity Fund might invest in one or many Projects.

What is this Opportunity Fund stuff all about?

A huge Federal Tax Law passed in December 2017 had buried within it a provision which sets up a new type of transaction – the Opportunity Fund Rollover.  In the Opportunity Fund Rollover transaction, a taxpayer with capital gains (e.g. after selling stock or real estate) invests the gain in an Opportunity Fund.  The Opportunity Fund in turn invests in Projects located in Opportunity Zones (financially disadvantaged areas of the United States).  The taxpayer receives some tax advantages, and the Opportunity Zone receives new investment to bolster its economy.

Questions About This Website

I am part of the Opportunity Fund Industry. How do I post on this website?

We created this User Guide with step by step instructions about posting to this website.

Do you accept advertising?

We do not accept advertising at this time.  We may accept advertising in the future, and if so if you are interested in advertising with us, please send email to info@Opportunity-Funds.com and we will reach out if we go in that direction.

Are there any fees to use this website?

No.  All use of this website is free of charge.

What does this website do?

This website is a communication-hub.  On this website you can view reams of information about the Opportunity Fund industry.  And if you are part of the Opportunity Fund Industry, you can post information about what you do, for others to see.

Questions About The Laws And Rules

I heard that the IRS publishes its own FAQ’s about Opportunity Funds.

You heard right.  We don’t find them particularly informative, but please judge for yourself by viewing the IRS FAQ here.

I have specific questions about the laws and rules. Where can I find answers?

The Basics Page on our website provides a high-level overview.  The Opportunity Fund Legislation itself is relatively short and accessible.  Google is a great resource of course.  And if you have questions, we encourage you to reach out to the Service Providers registered on our Site.  Because the Opportunity Fund industry is new and emerging, most service providers are happy to hear the challenges people are facing and discuss and answer questions.

If you prefer the video approach, there are a couple videos up on YouTube now, and more are certainly coming soon:

  1. 10 Minute Talk That Explains the Background and Justification for the Opportunity Fund legislation.
    https://www.youtube.com/watch?v=gmn19vSE-V4
  2. Series of YouTube Videos that explain and explore the nuts and bolts of the Opportunity Fund/Zone system.
    https://www.youtube.com/channel/UCLat_nkZXtTrINQgChyDfJQ

 

 

What laws govern Opportunity Fund investment?

You will find links to the laws that are out there here.  As you can see, there are not a lot of laws yet.   The IRS is expected to issue regulations in late Summer or early Fall 2018.  Until those regulations come out, the Opportunity Fund space a wild-west kind of experience with few rules.

Questions That Taxpayers Commonly Ask

Are Opportunity Funds reviewed and approved by the government or some other organization?

No.  You should carefully confirm information about an Opportunity Fund before investing.  We feel the most important aspect to investigate is the identity of the people running the Fund.  Who are they?  What is their past experience and how long is their track record?  People who have carefully and effectively built a good reputation over many years will be more careful with your money.  Here is a publication by the SEC about researching financial professionals.  And here is an article from Forbes on the same subject.

How long must I leave my money invested in an Opportunity Fund? Can I get the money out if I need it?

The rules about investment liquidity will be in the agreements you sign with the Opportunity Fund.  There are no hard and fast rules.  Some Funds may let you withdraw money at any time. Others may require you to leave your money invested for 10 years or more.  Keep in mind, however, that if you do withdraw your money early, you will not receive all of the potential tax benefits of the Opportunity Fund Rollover investment.

What can the Opportunity Fund can do with my money?

The rules about what an Opportunity Fund can do with your money will typically be reflected in documents with names like Prospectus, Offering Memorandum, Operating Agreement or Investor Agreement.  You will see these documents after you contact an Opportunity Fund.

How soon do I have to invest my Capital Gains in an Opportunity Fund?

You have 180 days after realizing the gains, to invest them in an Opportunity Fund.  Generally you “realize” the gains on the day of closing of a sale.