2026 Guide: How to Set Up an Opportunity Zone Fund to Defer Capital Gains
by Raises.com
Setting up an opportunity zone fund in the United States lets you defer or eliminate capital gains tax on real-estate or business acquisitions. By channeling investor money through a dedicated fund that targets qualified Opportunity Zones, you can lock in tax savings, defer gains while the assets appreciate, and potentially erase the tax liability after a five-year hold.
Key Lessons from the Video
- Identify a Qualified Opportunity Zone, Use the Treasury's map to locate designated zones where investments trigger tax benefits.
- Form a Dedicated Fund or SPV, Create a legal entity that will hold the capital, issue partnership interests, and comply with SEC regulations.
- Invest and Hold for Tax Savings, If you keep the capital in the fund for 1 year you save roughly 20% of capital gains tax, 2 years about 40%, and after 5 years you owe no capital gains tax.
- Leverage 1031 Exchanges When Possible, Swap one real-estate asset for another of equal or greater value without triggering capital gains, extending the deferral period.
- Work with Professionals, Engage a CPA and a qualified attorney to ensure the fund meets Opportunity Zone requirements and to draft the PPM, subscription agreement, and operating agreement.
Comparison of Tax-Advantaged Structures
| Feature | Opportunity Zone Fund | 1031 Exchange | Traditional Direct Purchase |
|---|---|---|---|
| Primary Tax Benefit | Deferral and possible elimination of capital gains after 5 years | Deferral of capital gains on like-kind real-estate swaps | Capital gains taxed at sale |
| Minimum Holding Period | 5 years for full tax elimination (partial benefits at 1-2 years) | Immediate swap; no fixed hold required | None |
| Eligible Assets | Real estate, businesses, and other qualified investments within designated zones | Real-estate only, must be like-kind | Any asset class |
| Complexity | High, requires fund formation, compliance reporting | Medium, requires qualified intermediary and strict timelines | Low, standard purchase process |
| Typical Use Cases | Large-scale acquisitions, roll-ups, syndications seeking tax efficiency | Investors looking to reposition real-estate portfolios | Buy-and-hold investors without tax-deferral goals |
Applying the Strategy to a Business or Real-Estate Purchase
Start by drafting a clear investment thesis that targets an Opportunity Zone asset. Then, use Raises.com to create a fund package that includes a PPM, subscription agreement, operating agreement, and CFA-style financial proformas. Upload the documents to a secure data room, build a pitch deck, and let Raises.com introduce you to both debt and equity investors. With over $300M raised across 143 documented case studies, the team can help you launch the fund on a flat-fee basis, without success fees or carry.
Frequently Asked Questions
What is an Opportunity Zone and how does it work?
An Opportunity Zone is a designated low-income area where investments receive federal tax incentives, including capital gains deferral and potential elimination after a five-year hold.
Can I use a 1031 exchange inside an Opportunity Zone fund?
Yes, you can combine a 1031 exchange with an Opportunity Zone investment to defer gains on a real-estate swap before rolling the proceeds into the fund.
Do I need a CPA to set up an Opportunity Zone fund?
Engaging a CPA and a qualified attorney is essential to ensure compliance with IRS rules and to correctly calculate the tax benefits.
How long must I hold the investment to avoid capital gains tax?
Holding the investment for at least five years removes the capital gains tax liability on the original gain.
What fees does Raises.com charge for fund formation?
Raises.com works on a flat-fee model with no success fee or carry, delivering the full fund package and investor introductions.
Next Steps
Ready to structure a fund that maximizes tax efficiency for your acquisition? Learn how it works and book a call with the Raises.com team today.