What amount of deferred gain for a Qualified Opportunity Fund (QOF) do I enter?
When you sell a QOF you must recognize any short-term or long-term gain you deferred in a prior tax year into the QOF. These deferred gains can be found on Form 8949 of your tax return with code Z. Short-term will be listed on Part I of Form 8949. Long-term will be listed on Part II of Form 8949.
If you only sold a portion of your QOF deferred gain investment you would only enter a portion of the deferred gain found on your prior return. If the fair market value of the QOF is less than the amount of gain your deferred, you would enter the fair market value.
For example, in 2018 you deferred $100 of short-term capital gain into a QOF. In 2025 you sell 50% of your QOF investment. You would only enter $50 ($100 * .50) of short-term deferred gain.
If you only sold a portion of your QOF deferred gain investment you would only enter a portion of the deferred gain found on your prior return. If the fair market value of the QOF is less than the amount of gain your deferred, you would enter the fair market value.
For example, in 2018 you deferred $100 of short-term capital gain into a QOF. In 2025 you sell 50% of your QOF investment. You would only enter $50 ($100 * .50) of short-term deferred gain.
