QOZ Calculated Return Results
The projections shown are for illustrative purposes only and are based on assumptions from the First Harbor Square Qualified Opportunity Zone investment. These figures represent forward-looking statements and do not guarantee future performance. Actual results may vary due to market conditions, timing, and other factors. This tool does not constitute financial, legal, or tax advice. Please consult a licensed financial advisor or tax professional before making any investment decisions.
How was this calculated?
This calculator estimates the potential impact of reinvesting eligible capital gains into a Qualified Opportunity Fund (QOF). Using your entered investment amount, it compares projected outcomes with and without QOZ treatment at 3.5, 5, and 10 years. Both scenarios use the same assumed annual return, isolating the potential effect of investing the full deferred gain rather than paying federal capital gains tax upfront.
1. We Used Your Investment Amount
We used the eligible capital gain amount you entered as the starting point. This may include gains from the sale of stocks, real estate, cryptocurrency, a business, or another qualifying asset. With QOZ treatment, the calculator assumes the full gain is invested. Without QOZ treatment, estimated federal capital gains tax is deducted before investing.
2. We Applied Three Projected Returns
The calculator models three illustrative First Harbor Square exit scenarios: a 30.0% annual IRR over 3.5 years, a 21.5% annual IRR over 5 years, and a 12.0% annual IRR over 10 years. Each annual return is compounded over its respective holding period and applied equally to the QOZ and non-QOZ scenarios.
3. We Calculated Federal Taxes
The calculator assumes a 23.8% federal capital gains tax rate. Without QOZ treatment, tax on the original gain is paid upfront and investment appreciation is taxed at exit. Under the post-2026 QOZ rules, the original gain is deferred for up to five years. A qualifying five-year hold receives a 10% basis step-up, while qualifying QOF appreciation may be excluded from federal capital gains tax after a 10-year hold.