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How important is it to go with a fund that has a formal opinion issued in connection with their Qualified Opportunity Fund?

What will the opinion tell me about the Qualified Opportunity Fund? Are opinions common practice?


Answers
  • Brad Cohen
    July 16, 2019

    Formal opinions are not necessary. Go with people you trust and people who know what they are doing.

  • Valerie Grunduski
    September 23, 2019

    Investing where a formal opinion has been issued is helpful to give the investor confidence that her investment will meet the qualifications and eventually be eligible for the 10-year step-up in basis.

  • Matthew Rappaport
    July 15, 2019

    An opinion is better than no opinion, but the opinion is not a requirement to have a qualifying investment. You do need some sort of verification that the fund is in fact a QOF, though, beyond the word of the sponsor.

  • Samuel Weiser
    July 08, 2019

    An opinion of counsel reduces risk to the investor related to compliance with the law and associated regulations, but generally, it is not necessary or customary for a fund to obtain such an opinion. Due diligence on the part of the investor should enable the investor to reach a conclusion whether the fund complies with the law.

  • Maria De Los Angeles Rivera
    July 03, 2019

    This is not required by the law or the regulations. It will depend on what the investors in the fund will require as part of their due-diligence work.