--- title: QOZ Timelines description: "Step 1: An investor with a recently realized capital gains elects to invest this gain into the ..." image: https://www.realized1031.com/hubfs/social-suggested-images/Realized_Glossary_Graphic.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # QOZ Timelines ![Screen Shot 2019-10-22 at 2.47.11 PM](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/QOZ/Screen%20Shot%202019-10-22%20at%202.47.11%20PM.png?width=629&name=Screen%20Shot%202019-10-22%20at%202.47.11%20PM.png) Step 1:  An investor with a recently realized [capital gains](https://www.realized1031.com/glossary/capital-gain) elects to invest this gain into the Qualified Opportunity Fund (QOF), taking stock or a partnership interest in return.  By so doing, the investor gets to [defer](https://www.realized1031.com/glossary/deferred-gain) capital gain income. Step 2:  The Qualified Opportunity Fund uses the investment to acquire Qualified Opportunity Zone Property.  This investment represents the QOF’s interest in the underlying business in the low-income community. Step 3:  The investor holds the interest for as long as he desires or for some period of time as may be stipulated in the investment agreement with the QOF.   Step 4:  If the investor sells or exchanges his Qualified Opportunity Fund interest before Dec. 31, 2026, he/she will recognize the deferred capital gain.  If the holding period is at least 5 years, the basis of such investment shall be increased by an amount equal to 10% of deferred capital gain. If the holding period is at least seven years, the basis of such investment shall be increased by an additional 5%. Step 5.  In any event, the investor’s capital gain deferral period ends on Dec. 31, 2026, and so if the investment is still outstanding, the deferred capital gain must be recognized then (also known as phantom income date).  The holding periods noted in Step 4 are taken into account at this point. Step 6:  If the investor holds his interest in the QOF for at least 10 years, he/she is entitled to a fair market value (“FMV”) basis step-up so that any appreciation in the value of his interest can be excluded from income. Since the deferred capital gain is triggered no later than December 31, 2026, a taxpayer must rollover gains into a QOF no later than 2021 to realize the 10% benefit and no later than 2019 to take advantage of the full 15% benefit. Note: The ability to eliminate gain on a taxpayer’s QOF investment could cease upon the expiration of QOZ designations on December 31, 2047. Download The Guide To Opportunity Zones [![Download The Guidebook to QOZ's](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/QOZ-eBook-250.png?width=250&height=250&name=QOZ-eBook-250.png "Learn More About Qualified ...") ](https://www.realized1031.com/glossary/qoz-timelines#blogform) Download eBook ---   --- ### Download The Guidebook to QOZ's ![Download The Guide To Opportunity Zones](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/QOZ-eBook-550.jpg?width=550&height=650&name=QOZ-eBook-550.jpg) Learn More About Qualified Opportunity Zones Investments. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. 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("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. 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For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "Step 1: An investor with a recently realized capital gains elects to invest this gain into the Qualified Opportunity Fund (QOF), taking stock or a partnership interest in return. By so doing, the investor gets to defer capital gain income. Step 2: The Qualified Opportunity Fund uses the investment to acquire Qualified Opportunity Zone Property. This investment represents the QOF’s interest in the underlying business in the low-income community. Step 3: The investor holds the interest for as long as he desires or for some period of time as may be stipulated in the investment agreement with the QOF. Step 4: If the investor sells or exchanges his Qualified Opportunity Fund interest before Dec. 31, 2026, he/she will recognize the deferred capital gain. If the holding period is at least 5 years, the basis of such investment shall be increased by an amount equal to 10% of deferred capital gain. If the holding period is at least seven years, the basis of such investment shall be increased by an additional 5%. Step 5. In any event, the investor’s capital gain deferral period ends on Dec. 31, 2026, and so if the investment is still outstanding, the deferred capital gain must be recognized then (also known as phantom income date). The holding periods noted in Step 4 are taken into account at this point. Step 6: If the investor holds his interest in the QOF for at least 10 years, he/she is entitled to a fair market value (“FMV”) basis step-up so that any appreciation in the value of his interest can be excluded from income. Since the deferred capital gain is triggered no later than December 31, 2026, a taxpayer must rollover gains into a QOF no later than 2021 to realize the 10% benefit and no later than 2019 to take advantage of the full 15% benefit. 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