Qualified Opportunity Zone Funds Tax Benefits

The Pearl Fund uses two separate tax incentives: the Opportunity Zone (OZ) and the Qualified Small Business Stock (QSBS). The QSBS tax incentive begins after 5 years and the OZ after 10 years. Depending on when our investment gets acquired (or go public) we use the appropriate tax incentive. Below is more detail on the OZ tax incentive.

  • Opportunity Zone Tax Benefits

    A temporary tax deferral for capital gains reinvested in an opportunity fund. The deferred gain must be recognized on the date the opportunity zone investment is sold or December 31, 2026, whichever comes first.

    A step-up in basis for capital gains reinvested in an opportunity fund. The basis of the original investment is increased by 10% if the investment in the qualified opportunity zone fund is held by the taxpayer for at least 5 years, and by an additional 5% if held for at least 7 years, excluding up to 15% of the original gain from taxation.

    A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified opportunity zone fund if the investment is held for at least 10 years. Note: this exclusion applies to the gains accrued from an investment in an opportunity fund, not the original gains