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Eligible Gain

Eligible Gain generally refers to the capital gains from the sale or exchange of an investment that can be legally deferred, reduced, or eliminated through reinvestment in a QOF.

The Tax Cuts and Jobs Act of 2017 established QOFs and Opportunity Zones to stimulate economic development and job creation in distressed communities. Investors can receive tax benefits if they reinvest their eligible gains into these funds.

The Internal Revenue Service (IRS) provides specific rules about what types of gains are eligible. For example, the gain must be from a sale or exchange with an unrelated person, and it must be invested in a QOF within a certain time period, typically 180 days from the date of the sale or exchange.