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QOF Capital Gain Deferral Calculator
QOFs defer capital gains. This calculator sizes benefit.
Total tax savings
$693,092
Deferral benefit (time value)
$145,692
Step-up benefit on appreciation
$547,400
How the math works
Deferral benefit = original tax − PV at payment date. Step-up = appreciation × rate (10+ year hold).
$1.5M gain, $357k original tax, 9-yr deferral at 6%: $146k deferral benefit. $2.3M appreciation × 23.8% = $547k step-up. Total: $693k tax savings on $1.5M gain → 46%. Requires 10-year hold and compliant QOF.
How to Use
- Enter capital gain rolled in.
- Enter capital gain rate %.
- Enter hold years.
- Enter QOF value at exit.
- Read total tax savings.
Frequently Asked Questions
QOF basics?
Invest eligible capital gain into Qualified Opportunity Fund within 180 days. Defer gain recognition to 2026 (or earlier sale). 10+ year hold: step-up of QOF investment basis to FMV = tax-free appreciation. Real estate-focused QOFs common.
Timing?
2017 TCJA: enacted opportunity zone regime. 10% basis step-up: sunset after 2021. 15% step-up: sunset after 2019. Deferred gain recognized December 31, 2026. Post-2026: new QOF investments defer through 2028. Rules evolving.
Benefits?
Original gain deferred (time value of money). Tax-free QOF appreciation after 10 years — potentially massive. Combined benefit: 25-35% effective tax savings on original gain + growth. Requires 10-year hold and QOF compliance.
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