Opportunity Zones were established by Congress in the 2017 Tax Cuts and Jobs Act as an innovative approach to spur long-term private sector investments in low-income communities nationwide. The Opportunity Zone investment tool allows private investors to receive tax benefits by reinvesting capital gains into a Qualified Opportunity Fund (QOF) that in turn makes qualified investments in real estate or businesses located in distressed communities nationwide. 

Deferral of Gain

Temporarily defer invested capital gains until date QOF investment is sold or December 31, 2026, whichever is earlier.

Step-Up in Basis

Original investment's tax basis increases by 10% after 5 years.

Permanent Exclusion

After 10 years, permanently exclude capital gains on any appreciation of the QOF investment.

*Benefits vary depending on duration of investment. Per draft Treasury guidance and the guideline update in October 2018, investments in a QOF must be made by 12/31/21 to be eligible for the 10% step up in basis for holding 5 years.  Per draft Treasury guidance, a QOF investment made before the Qualified Opportunity Zone's designation expiration and held for 10 years or more years can qualify for permanent capital gains exclusion through 12/31/47.  This is not tax advice. You should consult with your tax advisor.


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Chestnut Funds extends its expertise through its affiliate relationships. Chestnut Development offers development management and project management services to select Chestnut Funds investments. Chestnut Catalyst brings knowledge and experience in impact framework design and measurement, strategic capacity building, and venture investing to Chestnut's Opportunity Zone Fund.

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