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Acquisition Date

The Acquisition Date refers to the date at which a certain asset or property was acquired or purchased by the QOF.

The significance of the Acquisition Date arises due to the regulations that govern Opportunity Zones and QOFs under the U.S. Tax Cuts and Jobs Act of 2017. According to these regulations, a QOF has a certain period (usually 30 months) from the Acquisition Date to improve a property it has purchased in an Opportunity Zone to the extent that the fund’s basis in the property doubles.

This date is also important for investors in QOFs because the tax advantages associated with these investments depend on how long the investment is held. For example, an investor who holds an investment in a QOF for at least 5 years before selling can exclude 10% of the gain from taxation, while an investor who holds an investment for at least 7 years can exclude 15%. If the investment is held for 10 years or more, all gains realized from the sale of the QOF investment are excluded from taxation.

Therefore, the Acquisition Date is a crucial parameter for both QOFs and their investors to keep track of.