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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

  1. Enter capital gain rolled in.
  2. Enter capital gain rate %.
  3. Enter hold years.
  4. Enter QOF value at exit.
  5. 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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