Sometimes the easiest way to understand the Opportunity Zone strategy is to walk through an example. This case study follows a hypothetical investor — call her the investor — who realizes a $500,000 capital gain from selling appreciated stock and chooses to invest it into a Qualified Opportunity Fund (QOF) rather than pay the tax now. We'll trace the starting gain, the decision to invest over paying tax, the deferral and reinvestment, the 10-year tax-free outcome, and a side-by-side comparison to a taxable path where she simply pays the tax and reinvests the rest. Critically, this entire scenario — the investor, the $500,000 gain, the assumed returns, and every figure — is illustrative only: a hypothetical composite created to explain the mechanics, not a real client, a prediction, or a promise of results. Actual results vary widely and depend on the investment's performance, tax rates, and the current rules. OZ rules are time-sensitive and evolving — verify the current law and run your own numbers with your CPA. This is educational information, not investment or tax advice.
The investor's starting gain
Our hypothetical investor sells a long-held stock position and realizes a $500,000 long-term capital gain. (To keep the illustration simple, we focus on this single gain and use round numbers.) Without any tax planning, that gain would be subject to federal capital-gains tax and, depending on her state, state tax — for illustration only, assume a combined rate of about 30%, which would mean roughly $150,000 of tax, leaving about $350,000 to reinvest.
She doesn't need the cash immediately, has a long investment horizon, and is an accredited investor exploring tax-efficient ways to redeploy the proceeds. Because her gain is a capital gain (and the OZ program accepts any capital gain, not just real estate), her stock gain is eligible for OZ investment — she has 180 days from the sale to act.
So she faces a familiar choice: pay the tax now and reinvest what's left, or defer the tax by investing the gain into a QOF. So the investor's starting gain — a $500,000 long-term capital gain from selling appreciated stock, which would face roughly $150,000 of combined tax (at an assumed illustrative ~30% rate), leaving about $350,000, but which is eligible for OZ investment within 180 days because any capital gain qualifies — sets up her decision. Remember, these figures are illustrative only. Understanding her starting point frames the case study. The investor realizes a $500,000 stock gain (assumed ~30% tax, ~$150,000, for illustration only) and, because any capital gain qualifies for OZ investment within 180 days, must choose between paying the tax and deferring it in a QOF.
Every number in this case study is illustrative — a teaching example, not a forecast. The point is the mechanics, not the magnitude.
Choosing a QOF over paying tax
Rather than pay the roughly $150,000 of tax now, the investor decides — in this illustration — to invest the full $500,000 gain into a Qualified Opportunity Fund within her 180-day window. By doing so, she defers the tax on the original gain (no tax due now) and puts the entire pre-tax $500,000 to work, instead of reinvesting only about $350,000 after tax.
Her reasoning, in the scenario, rests on three points: she keeps more capital working from day one (the full gain, not the after-tax remainder); she gains the potential for the new investment's appreciation to be entirely tax-free after a 10-year hold; and she's comfortable with the trade-offs (illiquidity, a long hold, and development risk). She evaluates the fund first on its merits — the sponsor, the projects, and the zone fundamentals — and treats the tax benefits as an enhancement, not the sole driver.
So she chooses to defer rather than pay, committing to the long hold to pursue the larger benefit. So choosing a QOF over paying tax — investing the full $500,000 gain (rather than paying ~$150,000 in tax and reinvesting ~$350,000), to keep more capital working, pursue tax-free 10-year growth, and accept the illiquidity and risk, after evaluating the fund on its merits — is the investor's decision in this illustration. The figures are hypothetical. Understanding her choice shows the strategy's appeal. In this illustrative scenario, the investor invests the full $500,000 gain in a QOF (deferring ~$150,000 of tax) rather than reinvesting only ~$350,000 after tax, accepting the long hold to pursue tax-free growth.
Deferral and reinvestment
Having invested the $500,000 gain, the investor now holds a QOF interest, and the fund deploys her capital into its Opportunity Zone projects (in this illustration, ground-up multifamily development in a designated zone). The tax on her original $500,000 gain is deferred — not eliminated — to its recognition date. Under the post-2026 OZ 2.0 framework, that would be a rolling 5 years from her investment (an earlier OZ 1.0 investor would instead recognize on the fixed December 31, 2026 date).
When the recognition date arrives, she owes the deferred tax on the original $500,000 gain — roughly $150,000 at our assumed illustrative rate — so she plans for that liability (the deferral postponed the tax, giving her years of having the full amount invested, but the original gain's tax still comes due). Meanwhile, her full $500,000 has been compounding in the fund, rather than the smaller after-tax sum.
So during the hold, she enjoys the deferral's benefit (more capital working) while the original gain's tax awaits its recognition date, and the new investment grows. So deferral and reinvestment — the investor's full $500,000 working in the QOF's projects, with the original gain's tax deferred to its recognition date (a rolling 5 years under OZ 2.0, or the fixed 2026 date under OZ 1.0) and then paid (roughly $150,000, illustrative), while the new investment compounds — show the strategy in motion. The figures are hypothetical. Understanding it shows the deferral mechanics. The full $500,000 compounds in the QOF while the original gain's tax is deferred to its recognition date and then paid (~$150,000, illustrative) — all figures illustrative only.
10-year tax-free outcome
The marquee benefit arrives at the 10-year mark. Suppose, purely for illustration, that the investor's $500,000 QOF investment grows to $900,000 over the 10+ year hold — an assumed result, not a projection. Because she held at least 10 years, she can elect to step up her basis to fair market value at sale, making the $400,000 of appreciation effectively tax-free. So she pays no capital-gains tax on that $400,000 of new growth.
Compare that to a taxable investment: if a $400,000 gain were taxed at our assumed ~30% illustrative rate, she'd owe about $120,000, leaving $280,000 of after-tax growth instead of the full $400,000. So the 10-year exclusion, in this illustration, saves her roughly $120,000 of tax on the appreciation — on top of the years of deferral on the original gain. Note this exclusion applies to the new investment's appreciation, not the original gain (which she already recognized at its recognition date).
So the 10-year hold delivers the strategy's headline payoff: tax-free growth on the new investment. So the 10-year tax-free outcome — the investor's $500,000 growing to an assumed $900,000, with the $400,000 of appreciation excluded from tax via the 10-year basis step-up (saving roughly $120,000 versus a ~30% taxable result), on top of the deferral on the original gain — is the strategy's marquee payoff in this illustration. Every figure is hypothetical and not a promise. Understanding it shows the exclusion's value. After 10 years, the assumed $400,000 of appreciation is tax-free (saving ~$120,000 illustrative tax), the headline OZ benefit — all figures illustrative only, actual results vary.
- All figures here — the $500,000 gain, the assumed returns, the tax rates, and every dollar — are illustrative only, a hypothetical composite, not a prediction or promise of results.
- By investing the full $500,000 gain (rather than ~$350,000 after a ~$150,000 illustrative tax), the investor keeps more capital working from day one.
- The original gain's tax is deferred to its recognition date and then paid (~$150,000, illustrative); the new investment's appreciation can be tax-free after 10 years.
- Versus a taxable path, the 10-year exclusion saves an illustrative ~$120,000 on the appreciation — but actual results vary, and you should verify the current rules and run your own numbers with your CPA.
Comparison to a taxable path
To see the difference, compare the OZ path to a taxable path where the investor pays the tax now and reinvests the rest. On the taxable path, she pays roughly $150,000 on her $500,000 gain immediately, leaving about $350,000 to reinvest. If that $350,000 grew at the same rate (here, the illustrative 80% growth that took $500,000 to $900,000), it would reach about $630,000 — and the $280,000 of growth would itself be taxable on sale (roughly $84,000 at the assumed rate), leaving about $546,000 net of that final tax.
On the OZ path, the full $500,000 grows to an assumed $900,000, the $400,000 of appreciation is tax-free, and she has paid the deferred ~$150,000 on the original gain at its recognition date — leaving roughly $750,000 net (the $900,000 less the original gain's deferred tax). So in this illustration, the OZ path leaves materially more after tax than the taxable path, driven by investing the full gain and excluding the new appreciation.
So the comparison illustrates why the OZ strategy can outperform simply paying tax and reinvesting — though the advantage depends entirely on the investment performing. So the comparison to a taxable path — the OZ path (full $500,000 invested, grown to an assumed $900,000, appreciation tax-free, original gain's deferred tax paid) leaving materially more than the taxable path (tax paid up front, ~$350,000 reinvested, growth itself taxed) — illustrates the strategy's potential advantage. Every figure is illustrative and not a promise; actual results vary. Understanding it shows the strategy's value driver. In this illustration, the OZ path leaves more after tax than paying tax and reinvesting — but the advantage hinges on the investment performing, and all figures are illustrative only.
The OZ advantage in this example comes from two things working together: investing the full pre-tax gain, and making the new growth tax-free. Neither helps if the underlying investment doesn't perform.
Lessons and caveats from the scenario
This illustration carries a few lessons — and important caveats. The lessons: investing the full pre-tax gain (rather than the after-tax remainder) and excluding the new appreciation after 10 years are the two engines of the OZ advantage, and they compound. The investor's discipline in evaluating the fund on its merits first, and committing only long-term capital, is what made the strategy appropriate for her.
The caveats are essential. Every figure is illustrative — the $500,000 gain, the assumed ~30% tax rate, the assumed growth to $900,000, and the resulting savings are hypothetical, chosen to explain the mechanics, not to predict or promise any result. Real outcomes depend on the investment's actual performance (which could be lower, or a loss), the actual tax rates (which vary by income and state), and the current rules (which are evolving). The tax benefits can't rescue a poor investment — if the QOF underperformed or lost value, there'd be little or no appreciation to exclude, and she could lose principal.
So treat this scenario as a teaching tool, not a forecast, and run your own numbers under the current rules. So the lessons and caveats — investing the full gain and the 10-year exclusion as the OZ advantage's engines, the discipline of evaluating the investment first, and the essential caveat that every figure is illustrative (not a prediction or promise), with real results depending on performance, rates, and the evolving rules — frame the case study responsibly. The investor is not a specific real client. Understanding them keeps expectations realistic. The lessons (investing the full gain, the 10-year exclusion) come with the essential caveat that all figures are illustrative, results vary, the investment can lose money, and you must verify the current rules with your CPA.
How Baker 1031 helps you run the numbers
Baker 1031 Investments helps investors with real capital gains think through scenarios like this one — understanding how deferral, reinvestment of the full gain, and the 10-year exclusion can work together — and, importantly, how to ground any analysis in their own actual numbers and the current rules rather than an illustration.
QOF interests and related securities are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review (OZ investments are typically suitable for accredited investors). Baker 1031 does not provide tax or legal advice — your CPA models your actual tax outcome (your real rates, your recognition date, your specific facts), which is time-sensitive and evolving. We're candid that this case study is illustrative only — a hypothetical composite, not a prediction or promise; the investor is not a specific real client, and actual results vary, including the risk of loss. We help you evaluate well-vetted funds on their merits, understand the mechanics, and, if suitable, access them within the current rules, coordinating with your tax professionals. Our role is to help you run your own numbers responsibly and decide with clear eyes — investing only when the underlying opportunity, and not merely the tax benefit, is sound.
Frequently Asked Questions
Are the figures in this case study real?
No — every figure in this case study is illustrative only. The investor, the $500,000 gain, the assumed ~30% combined tax rate, the assumed growth to $900,000, and all the resulting savings are a hypothetical composite created to explain the OZ mechanics. They are not a prediction, a projection, or a promise of results, and the investor is not a specific real client. We chose round numbers and simple assumptions to make the mechanics clear, not to forecast any actual outcome. Real results vary widely and depend on the investment's actual performance (which could be lower, or a loss), the actual tax rates (which vary by income and state), and the current rules (which are evolving). So treat the case study as a teaching tool, not a forecast — and run your own numbers under the current rules with your CPA before making any decision. Actual outcomes will differ from this illustration.
Why invest the full $500,000 instead of paying tax first?
In the illustration, investing the full $500,000 gain (rather than paying roughly $150,000 in tax and reinvesting only about $350,000) keeps more capital working from day one. The deferral postpones the tax on the original gain to its recognition date, so the entire pre-tax amount compounds in the meantime, rather than the smaller after-tax sum. This larger base is one of the two engines of the OZ advantage (the other being the tax-free treatment of the new appreciation after 10 years). That said, the original gain's tax isn't eliminated — it comes due at the recognition date — and the benefit only materializes if the investment performs. So investing the full gain is advantageous in this illustration because more capital compounds, but it commits you to an illiquid, long-term, risk-bearing investment. All figures are illustrative; verify the current rules and run your own numbers with your CPA, since results vary.
When does the investor pay tax on the original $500,000 gain?
The tax on the original $500,000 gain is deferred, not eliminated, and comes due at its recognition date. Under the post-2026 OZ 2.0 framework, that would be a rolling 5 years from her investment date; an earlier OZ 1.0 investor would instead recognize on the fixed December 31, 2026 date. At that recognition date, she owes the deferred tax on the original gain — roughly $150,000 at the assumed illustrative ~30% rate — so she plans for that liability. The deferral gave her years of having the full amount invested, but the original gain's tax still comes due. Importantly, this is separate from the 10-year exclusion, which applies to the new investment's appreciation, not the original gain. So she pays the original gain's tax at the recognition date, while the new growth can still be tax-free after 10 years. All figures are illustrative; verify the current recognition rules with your CPA, since they are evolving.
How does the 10-year tax-free outcome work in this example?
In the illustration, the investor's $500,000 QOF investment grows to an assumed $900,000 over a 10+ year hold. Because she held at least 10 years, she can elect to step up her basis to fair market value at sale, making the $400,000 of appreciation effectively tax-free — so she pays no capital-gains tax on that new growth. Compared to a taxable investment where a $400,000 gain might be taxed at the assumed ~30% rate (about $120,000), the exclusion saves her roughly $120,000 on the appreciation, on top of the years of deferral on the original gain. This exclusion applies only to the new investment's appreciation, not the original gain (already recognized at its recognition date). So the 10-year hold delivers tax-free growth on the new investment — the strategy's headline payoff. Every figure is hypothetical and not a promise; actual results vary, and you should verify the current rules with your CPA.
How does the OZ path compare to just paying the tax?
In this illustration, the OZ path leaves materially more after tax. On the taxable path, the investor pays roughly $150,000 on her $500,000 gain immediately, reinvests about $350,000, and — if it grew at the same illustrative rate — reaches about $630,000, with the $280,000 of growth itself taxable on sale (roughly $84,000), leaving about $546,000 net. On the OZ path, the full $500,000 grows to an assumed $900,000, the $400,000 appreciation is tax-free, and she has paid the deferred ~$150,000 on the original gain — leaving roughly $750,000 net. So the OZ path leaves more, driven by investing the full gain and excluding the new appreciation. But the advantage depends entirely on the investment performing — if it underperformed, the comparison would change. All figures are illustrative only and not a promise; run your own numbers with your CPA, since actual results vary.
Could the investor lose money on this OZ investment?
Yes — and this is a crucial caveat to the illustration. OZ investments are real, risk-bearing investments (in this scenario, ground-up development), and they can underperform or lose money like any real estate or business venture. The assumed growth to $900,000 is hypothetical; in reality, the QOF could grow less, stay flat, or lose value. If it underperformed, there'd be little or no appreciation to exclude (the 10-year benefit applies only to gains that materialize), and she could lose part or all of her principal. The tax benefits enhance a successful investment but can't rescue a failing one. So the favorable outcome in the illustration assumes the investment performs — which is never guaranteed. This is why evaluating the fund on its merits (sponsor, projects, zone) comes first, with the tax benefits as an enhancement. All figures are illustrative; the investment carries genuine risk of loss, so invest only capital you can afford to risk.
Does the $500,000 have to be a real estate gain?
No — in this case study, the $500,000 is a stock gain, which highlights one of the OZ program's defining features: virtually any capital gain qualifies, not just real estate. Eligible gains include those from selling stock, a business, real estate, cryptocurrency, collectibles, or other capital assets. This is a key difference from a 1031 exchange, which is limited to real-property-for-real-property. So an investor with a large stock gain — who has no real estate to exchange — can still use the OZ strategy, as in this illustration. Only the capital-gain portion qualifies (you reinvest the gain, not the full proceeds), and you generally have 180 days to invest it. So the breadth of eligible gains makes the OZ accessible to investors well beyond real estate. All figures here are illustrative; verify the current eligibility rules with your CPA, since the program is evolving.
Is this case study a recommendation to invest?
No — this case study is educational, not a recommendation. It's an illustrative, hypothetical scenario designed to explain how the OZ strategy's mechanics work, not advice to invest or a suggestion that any particular outcome will occur. Whether an OZ investment is appropriate for you depends on your specific situation — your gain, goals, timeline, risk tolerance, and the current rules — and any recommendation through the broker-dealer follows a suitability review (OZ investments are typically suitable for accredited investors). Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific tax planning. So use this case study to understand the concepts, then evaluate your own situation with professional guidance before deciding. The investor in the scenario is not a real client, and the figures are illustrative only — your actual results would differ. Verify the current rules and run your own numbers with your advisors.
What assumptions drive the illustrative result?
Several simplifying assumptions, all chosen for clarity, drive the illustration: a single $500,000 long-term capital gain; an assumed combined federal-and-state capital-gains rate of about 30% (yielding roughly $150,000 of tax); an assumed growth of the investment from $500,000 to $900,000 over the 10+ year hold (an 80% increase); and the same growth rate applied to the taxable path for comparison. None of these are predictions — actual tax rates vary by income and state, actual investment performance varies widely (and could be a loss), and the current rules are evolving. Change any assumption and the result changes. So the illustrative outcome is entirely dependent on these hypothetical inputs, and your real situation will differ. This is why you should run your own numbers — with your actual gain, your actual rates, and realistic (not assumed) return scenarios — alongside your CPA. The assumptions make the math clean, not predictive. Verify the current rules before relying on any figure.
What if the investor had used a 1031 exchange instead?
A 1031 exchange wouldn't have been available for this gain, because the $500,000 is a stock gain, and 1031 exchanges apply only to real property exchanged for like-kind real property. So this investor — with a stock gain and no real estate to exchange — couldn't have used a 1031. This is precisely why the OZ program suited her: it accepts any capital gain. Had her gain instead been from selling investment real estate, a 1031 exchange would have been an option, deferring the gain indefinitely by reinvesting in like-kind real estate (with a potential step-up at death), but requiring continued real-estate reinvestment and strict 45/180-day deadlines — and it wouldn't offer the OZ's tax-free 10-year exclusion on new appreciation. So for a stock gain, the OZ is the applicable strategy here. The choice between OZ and 1031 depends on your gain type and goals; consult your CPA, and verify the current rules, since both regimes have nuances.
Why does the case study say the original gain's tax is still paid?
Because the OZ deferral postpones the original gain's tax — it doesn't eliminate it. In the illustration, the investor defers the tax on her $500,000 gain by investing it in a QOF, but that tax comes due at the recognition date (a rolling 5 years under OZ 2.0, or the fixed December 31, 2026 date under OZ 1.0), where she pays roughly $150,000 at the assumed rate. What can be eliminated is the tax on the new investment's appreciation — the growth after she invested — via the 10-year exclusion. So two separate things happen: the original gain's tax is deferred and then paid, while the new appreciation can be tax-free. Confusing the two is a common mistake. The OZ's most powerful benefit is the tax-free new growth, not the elimination of the original gain's tax. All figures are illustrative; verify the current recognition and exclusion rules with your CPA, since they are evolving.
How does Baker 1031 help me run the numbers?
We help investors with real capital gains think through scenarios like this one — how deferral, reinvesting the full gain, and the 10-year exclusion can work together — and, importantly, how to ground any analysis in their own actual numbers and the current rules, not an illustration. QOF interests are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review (OZ investments are typically suitable for accredited investors). Baker 1031 does not provide tax or legal advice — your CPA models your actual tax outcome (your real rates, recognition date, and specific facts). We're candid that this case study is illustrative only — a hypothetical composite, not a prediction or promise; the investor is not a real client, and results vary, including the risk of loss. We help you evaluate well-vetted funds on their merits, understand the mechanics, and, if suitable, access them within the current rules, coordinating with your tax professionals so you decide with clear eyes.
Why are round numbers and a 30% rate used?
Round numbers and a single assumed ~30% combined rate are used purely to keep the illustration clear and the math easy to follow — not because they reflect any specific investor's actual situation. Real capital-gains tax rates depend on the type of gain, your income, the applicable federal rate (and any additional taxes), and your state's rates, so the true combined rate could be higher or lower than 30%. Likewise, the $500,000 gain and $900,000 outcome are round figures chosen for simplicity. Using clean numbers makes the mechanics — the deferral, the reinvestment of the full gain, and the 10-year exclusion — easy to see, but it also means the figures are not predictive. So when you evaluate your own situation, use your actual gain, your actual tax rates, and realistic return scenarios with your CPA. The clean numbers serve the explanation, not a forecast. Verify the current rules and your specific rates before relying on any figure.
What's the single biggest takeaway from this case study?
The single biggest takeaway is that the OZ advantage, in this illustration, comes from two engines working together — investing the full pre-tax gain (rather than the after-tax remainder) and making the new investment's appreciation tax-free after a 10-year hold — but neither engine helps unless the underlying investment performs. The tax benefits amplify a successful investment; they can't rescue a poor one. So the strategy can leave you materially better off than paying tax and reinvesting (as the comparison shows), but only if the investment delivers, and only if it fits your situation (illiquidity, long hold, risk tolerance). And every figure here is illustrative — a teaching example, not a prediction or promise. So evaluate any OZ investment on its merits first, treat the tax benefits as an enhancement, and run your own numbers under the current rules with your CPA. Actual results vary, including the risk of loss.
How does Baker 1031 help with a case like this?
We help investors in situations resembling this illustration — someone with a substantial capital gain weighing whether to defer it into a QOF — understand the mechanics and evaluate whether it fits, grounded in their own real numbers and the current rules. QOF interests are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review (OZ investments are typically suitable for accredited investors). Baker 1031 does not provide tax or legal advice — your CPA models your actual tax outcome. We emphasize that this case study is illustrative only, a hypothetical composite, not a prediction or promise of results; the investor is not a real client, and actual results vary, including the risk of loss. We help you evaluate well-vetted funds on their merits, understand the deferral and 10-year exclusion, and, if suitable, access them within the current rules, coordinating with your tax professionals. Our goal is to help you decide responsibly, with realistic expectations and sound guidance.
Glossary
- Illustrative Only
- Hypothetical figures for teaching, not a prediction or promise.
- Hypothetical Composite
- A made-up scenario, not a specific real client.
- Capital Gain
- The taxable profit on a sale (here, $500,000 of stock).
- Deferral
- Postponing the original gain's tax via the QOF.
- Recognition Date
- When the deferred original gain is taxed.
- 10-Year Exclusion
- Tax-free appreciation on the new investment after 10 years.
- Basis Step-Up
- Raising basis to FMV at sale to exclude appreciation.
- Taxable Path
- Paying tax now and reinvesting the after-tax remainder.
- After-Tax Proceeds
- What's left to reinvest after paying the gain's tax.
- Assumed Rate
- The illustrative ~30% combined tax rate used.
- Full Pre-Tax Gain
- Investing the whole gain rather than the after-tax amount.
- QOF
- The Qualified Opportunity Fund the gain is invested in.
- 180-Day Window
- The deadline to invest the gain into a QOF.
- Risk of Loss
- The genuine possibility the investment loses value.
- Suitability Review
- Aurora Securities' review before any recommendation.
- Actual Results Vary
- Real outcomes differ from any illustration.
Sources & References
- IRS. Opportunity Zones Frequently Asked Questions
- IRS. Topic No. 409, Capital Gains and Losses
- Cornell Legal Information Institute. 26 U.S. Code § 1400Z-2 — Special rules for capital gains invested in opportunity zones
- U.S. Securities and Exchange Commission. Investor.gov — Opportunity Zones
Disclosures
This article is published by Baker 1031 Investments, LLC for general educational purposes for accredited investors and is not an offer to sell or a solicitation of an offer to buy any security, nor is it tax, legal, accounting, or investment advice or a recommendation. Any securities offering is made solely through a sponsor’s private placement memorandum (PPM) following a suitability determination. Securities offered through Aurora Securities, Inc. (ASI), member FINRA / SIPC; Baker 1031 Investments is independent of ASI.
Oil & gas mineral and royalty interests and DST programs are speculative, illiquid securities sold only to verified accredited investors and involve substantial risk, including possible loss of principal, commodity-price and production-decline risk, lack of control, and the risk that an intended 1031 exchange fails to qualify for tax deferral. Whether a particular interest qualifies as like-kind real property is a fact-specific legal determination that varies by state and by the terms of the instrument. Tax results depend on your individual circumstances. Consult your own CPA and attorney before acting. Past performance does not guarantee future results.
