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Qualified Opportunity Zone (QOZ) Stock

Qualified Opportunity Zone (QOZ) Stock is a concept linked to the Qualified Opportunity Fund (QOF) industry, a part of a U.S. federal program established to encourage investment in economically distressed communities known as Qualified Opportunity Zones (QOZs). The establishment of QOZs was a part of the Tax Cuts and Jobs Act of 2017. These zones are designed to spur economic development by providing tax benefits to investors.

QOZ Stock refers to the stock of a domestic corporation that is acquired after December 31, 2017, at its original issue from the corporation solely in exchange for cash, where such corporation is a Qualified Opportunity Zone Business (QOZB), or has been organized for the purpose of being a QOZB, and the corporation is a QOZB during substantially all of the QOF’s holding period for such stock.

Investors who invest in QOZ Stock through a Qualified Opportunity Fund can potentially benefit from deferring capital gains taxes and other tax incentives to enhance the economic viability and profitability of their investments, with the overarching goal of fostering development and job creation in low-income communities. This is aimed to align with the broader policy objective of reducing economic disparities across various regions.

It’s advisable to consult with a tax professional or legal advisor to get detailed and up-to-date information and advice tailored to one’s specific circumstances because regulations and guidelines related to QOZs and QOFs may be subject to change, and they can be quite complex in their application and requirements.