Qualified Opportunity Fund Valuation Services
QOF fair market value valuation services of prepared in accordance with USPAP and Rev. Rul. 59-60. Our valuations account for minority interest discounts, marketability constraints, and the December 31, 2026 inclusion event — built for tax filings, financial reporting, and audit defense.
- USPAP-compliant fair market value methodology
- DLOC and DLOM analysis for LP interests
- IRC 1400Z-2 deferred gain inclusion planning
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OPPORTUNITY ZONE PROGRAM
Qualified Opportunity Zones Carry Complex Tax Rules That Often Require a Professional Valuation
Qualified Opportunity Zones (QOZs) were created under the Tax Cuts and Jobs Act of 2017 to encourage long-term investment in designated low-income communities. Investors defer capital gains by reinvesting them into a Qualified Opportunity Fund (QOF), a partnership or corporation organized to hold at least 90% of its assets in qualifying opportunity zone property. In exchange, investors receive an LP or equity interest in the fund and the ability to defer, and potentially reduce, tax on the original capital gain under IRC 1400Z-2.
A valuation becomes necessary at several points in a QOF's life cycle. Investors who held their interest before December 31, 2019 face a mandatory inclusion event on December 31, 2026, when the deferred gain must be recognized regardless of whether the interest has been sold, and an accurate fair market value is required to calculate that gain correctly. Valuations are also called for when a fund reports to auditors or investors, when an LP interest is sold, gifted, or transferred, when a dispute arises among partners over capital account value, or when a fund undergoes a partial or full dissolution. Because QOF interests are illiquid and often held by a small group of investors, a defensible, USPAP-compliant valuation gives funds, LPs, and their CPAs or tax attorneys a documented basis for these events rather than an informal estimate.
QOF Valuation Group offers appraisals on QOF interests for funds, investors, LPs, and General Partners
We prepare fair market value valuations of qualified opportunity fund interests for tax reporting, financial planning, and compliance. Our valuations account for minority interest discounts, lack of marketability, and the IRC 1400Z-2 inclusion event timeline.
QOF Interest Valuation
Fair market value determination of LP interests in qualified opportunity funds, prepared in accordance with USPAP and Rev. Rul. 59-60 methodology. Suitable for tax reporting, financial statements, and investor planning.
Minority Interest & DLOM Analysis
Discount for lack of control and discount for lack of marketability analysis specific to illiquid QOF LP interests. Supports defensible valuations for tax compliance and investor communications.
IRC 1400Z-2 Compliance Valuation
Valuations prepared to address the December 31, 2026 inclusion event and deferred gain reporting requirements. Establishes fair market value baseline for tax planning and statutory compliance.
Fund-Level & Portfolio Valuation
Valuation of underlying fund assets and multi-asset QOF portfolios. Provides transparency for financial reporting, investor statements, and fund management decision-making.
Get Your QOF Valuation
Our team prepares fair market value valuations of qualified opportunity fund interests for tax reporting, financial planning, and compliance. Built to professional standards and defensible under IRS scrutiny.
Insights
QOF Valuation Insights
Guides on Qualified Opportunity Fund appraisals, gain inclusion, and the lesser-of rule.
When Does a QOF Need a Valuation for a Property Contribution?
Contributing a building or business interest to a Qualified Opportunity Fund instead of cash caps gain deferral at the lesser of basis or fair market value, which means the fund needs a defensible valuation before the deal closes. This guide walks through the IRS rules that trigger a QOF property contribution valuation and the related-party threshold that raises the stakes.
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Rev. Rul. 59-60 and Why it Still Governs QOF Interest Valuation Today
Revenue Ruling 59-60 set the IRS framework for fair market value in 1959, and it still controls how appraisers value Qualified Opportunity Fund interests today. This guide walks through the eight-factor test, the discounts it implies, and how they shape the stepped-up basis under a 10-year QOF election.
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How to Value a QOF Interest That Has Dropped Below Your Deferred Gain
If your qualified opportunity fund interest is now worth less than the gain you deferred, the December 31, 2026 mandatory inclusion may let you recognize far less than that original amount. This guide walks through the lesser-of rule, the appraisal factors that can push the value down, and a worked example showing the math.
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QOF Lesser-of Rule: Why Your 2026 Gain Inclusion Needs a Real Appraisal
The QOF lesser-of rule caps your December 31, 2026 gain inclusion at the fair market value of your fund interest minus basis, not the deferred gain itself. This guide explains how that rule works and why it requires a defensible appraisal of an illiquid LP interest, not a guess at NAV.
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IRS Form 8997: How to Report Your Qualified Opportunity Fund Investment Each Year
Every taxpayer holding a Qualified Opportunity Fund investment must file IRS Form 8997 with their federal return each year, and the OBBBA's 2027 rule changes make accurate reporting more consequential than ever. This guide walks through the form's four parts, the basis step-up rules under the old and new regimes, and where a defensible fair market value substantiates what you report.
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IRS Form 8997: What Qualified Opportunity Fund Investors Must Report Every Year
IRS Form 8997 is the annual statement every Qualified Opportunity Fund investor must file to report deferred gains, dispositions, and year-end holdings. This guide breaks down all four parts of the form and explains why an independent valuation protects the basis and gain figures behind it.
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What Is a Qualified Opportunity Zone Fund and How Does It Work?
A qualified opportunity zone fund is a corporation or partnership that self-certifies with the IRS to hold at least 90% of its assets in opportunity zone property, unlocking capital gains deferral in exchange for a strict compliance regime. This guide breaks down the statutory requirements, the 90% asset test, and why the deferred gain inclusion event eventually requires a defensible fair market value appraisal.
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What Is IRS Form 8996? A Guide to QOF Self-Certification and the 90% Asset Test
IRS Form 8996 is how a Qualified Opportunity Fund self-certifies its status and reports the 90% asset test each year, but it says nothing about what an investor's QOF interest is actually worth. This guide breaks down the form's mechanics and explains why investors still need a separate valuation before the December 31, 2026 inclusion event.
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Valuing a QOF Minority Interest: Applying Discounts for Lack of Control and Marketability
Valuing a Qualified Opportunity Fund interest for tax purposes often requires a discount for lack of control and a separate discount for lack of marketability, and these adjustments are entirely distinct from the entity-level math used for the 90% asset test. This guide shows fund sponsors, CPAs, and investors how DLOC and DLOM apply, in what order, and with what support.
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FAQ
Frequently Asked Questions
What is a QOF valuation, and why do I need one?
A QOF valuation is a fair market value determination of your interest in a qualified opportunity fund. You need one to establish the basis of your LP interest for tax reporting, to satisfy IRS requirements around the December 31, 2026 inclusion event under IRC 1400Z-2, and to support your tax filings with your CPA or tax attorney. Our valuations are prepared in accordance with USPAP and Rev. Rul. 59-60 methodology, so they withstand scrutiny.
How is fair market value of an LP interest determined?
Fair market value reflects what a willing buyer would pay a willing seller, neither under pressure to buy or sell. For LP interests, we apply standard valuation methodologies including income and market approaches, and we account for minority-interest discounts (DLOM and DLOC) where applicable. The valuation reflects the fund's underlying assets, performance, and the investor's ownership stake and control rights.
What credentials do your valuers hold?
Our team holds credentials with leading organizations such as the ASA, NACVA, AICPA (ABV), and CFA. Every valuation is prepared in accordance with USPAP and professional appraisal standards. We do not represent that any single valuer holds every credential; our work is fulfilled by a credentialed team with deep expertise in business valuation and LP-interest analysis.
What is the December 31, 2026 inclusion event, and how does it affect my QOF investment?
Under IRC 1400Z-2, if you invested in a QOF before December 31, 2019, you have the option to include your deferred gain in income on or before December 31, 2026. A current fair market value of your QOF interest is essential to calculate the deferred gain accurately and to make an informed decision about whether to elect inclusion. We prepare valuations specifically to support this analysis.
Can you value a minority or non-controlling LP interest?
Yes. Minority LP interests are valued with appropriate discounts for lack of control (DLOC) and lack of marketability (DLOM). These discounts reflect the limited influence and liquidity constraints inherent in a non-controlling position. Our methodology is grounded in Rev. Rul. 59-60 and recognized valuation standards.
What information do you need from me to prepare a valuation?
We typically request the fund's most recent audited financial statements or K-1, your LP agreement or subscription documents, the fund's investment policy and performance history, and your ownership percentage and capital account balance. We may also request distributions received and any side letters or amendments affecting your interest. We'll provide a detailed request list when you engage us.