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Disclaimers & General Information

 

DISCLAIMER
We intend to qualify as a qualified Opportunity Fund ("Opportunity Fund"), though there is no guarantee that we will so qualify or that any investor would be able to realize any particular tax results by making an investment in us. Our ability to be treated as a qualified opportunity fund is subject to considerable uncertainty. 


The qualified Opportunity Zone rules were recently enacted, and only limited Internal Revenue Service guidance, including proposed Treasury Regulations, has been provided. It is possible that we may fail to meet the requirements to be treated as a qualified Opportunity Fund, and there can be no guarantee that any investor will realize any tax advantages of investing in a qualified Opportunity Fund as a result of an investment in us.As of November 15, 2018,  there is still uncertainty regarding the Opportunity Zone program, as the US Department of the Treasury has not released guidance on many of the questions left open by the Tax Cuts and Jobs Act of 2017 ("TCJA"), though regulations have been proposed that address several aspects of the program. These open questions include, but are not limited to: (a) reinvestment of proceeds from the interim disposition of properties by an Opportunity Fund, (b) how much time an Opportunity Fund will have to deploy the capital it has raised, (c)  and certain aspects of the interaction between general tax rules and the qualified Opportunity Fund rules. Accordingly, the foregoing discussion of the various aspects of the Opportunity Zone program is based upon positions that we believe to be reasonable given the statute as currently written, proposed regulations and prior Treasury and IRS precedent; however, there can be no assurance that the forgoing discussion will ultimately prove to be correct as Treasury begins issuing guidance and regulations on the Opportunity Zone program. Given such uncertainty, each prospective investor should consult with their personal tax advisors before making any investment into an Opportunity Fund, including UCF.

OVERVIEW
The Tax Cuts and Jobs Act (TCJA) provides that, for investors who have rolled capital gains into an opportunity fund and hold that investment in the opportunity fund for a period of ten years or more, that any additional appreciation beyond the amount initially invested realized by such investor from liquidating such investment will not incur additional federal capital gains taxes. However, please note that, given the uncertainty regarding future Opportunity Funds, each prospective investor should consult with their personal tax advisors before making any investment into an opportunity fund, including UCF.

DEFER CAPITAL GAINS
Section 1400Z-2(b)(1) states that capital gains rolled into an Opportunity Fund by an electing investor generally within 180 days of being realized shall be included in taxable income I the taxable year that includes the earlier of the disposition of the Opportunity Fund investment and December 31, 2026.

REDUCE TAX YOU OWE
Section 1400Z-2(b)(2)(B) states that an investor’s basis in the capital gain rolled into an opportunity fund is initially zero and that an investor will receive, a step up in basis of 10% of the deferred gain initially invested if held for at least five years, and a step-up in basis of an additional 5% of the deferred gain initially invested if held for at least seven years. Note, however, that as the deferred capital gain will be taxed on December 31, 2026, we expect that these holding periods would need to be satisfied prior to that date in order to receive the maximum benefits described herein.

The TCJA provides that, for investors who have rolled capital gains into an opportunity fund and hold that investment in the opportunity fund for a period of ten years or more, that any additional appreciation beyond the amount initially invested realized by such investor from liquidating such investment will not incur additional federal capital gains tax. However, please note that, given the uncertainty regarding future Treasury Department guidance, prospective investors should consult with their tax advisor before making any investment into an opportunity fund, including UCF.

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