Opportunity Zones Q&A: How Much of an OZ Fund Can One Investor Own?

During our Q3 and Q4 Opportunity Zones webinars last year, we received many great questions covering a wide range of important topics. To help further your understanding of this exciting new program, our Client Services team, which has decades of 1031 exchange experience, partnered with our co-presenter, Novogradac & Company, to provide responses.

Q: Is there a maximum ownership percentage (e.g., 10% or 20%) which a single investor can have in an QOZ Fund?

A: There are no limitations on the percentage of ownership that an investor can own in a Qualified Opportunity Fund, with perhaps one exception.

There is a requirement that Qualified Opportunity Zone Business Property must be acquired by the Qualified Opportunity Fund from an unrelated party, which status is determined by using a 20% common ownership test for relatedness. To the extent that the seller of an asset to a Qualified Opportunity Fund also wants to own an interest in the Qualified Opportunity Fund, their ownership in the Qualified Opportunity Fund would be limited to 20% or less.

However, for investors that have no relationship to the sellers of the property, there is no limitation on the percentage of their ownership in the Qualified Opportunity Fund.

This is the third installment of our Opportunity Zones Q&A blog series. You may read the previous questions and answers here:

  1. Previously Held Property
  2. Can an LLC Qualify as an Opportunity Fund?

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Innovative Strategies for Tax-Advantaged Investing Webinar

A JTC Americas’ webinar
Wednesday, August 24th, 2022
2:00 pm — 3:00 pm ET

Register now to reserve your space!

Join us for a free webinar to learn how industry leaders are approaching 1031 Exchanges, Opportunity Zones, and other tax incentives in 2022.

Titled “Innovative Strategies for Tax-Advantaged Investing” the webinar will feature a panel of industry experts discussing how investment strategies are evolving, the future of 1031, and how other programs like Opportunity Zones can help you defer capital gains and build wealth. They’ll also be answering questions from attendees so you can ask about specific situations and get the facts from those in the know.

This is a perfect opportunity to learn about the current state of 1031 from industry experts, so reserve your spot today!

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