Brooklyn Journal of Corporate, Financial & Commercial Law


Audrey E. Abate

First Page



The historic Tax Cuts and Jobs Act (TCJA), passed and signed into law in 2017, included a pilot program of a new kind of tax advantage: the Qualified Opportunity Zone. The obscure provision has since spawned novel investment vehicles, called Qualified Opportunity Funds, through which qualified individuals and entities participate in what are often significant tax advantages, including deferral of capital gains for up to ten years. Because Qualified Opportunity Funds have come into existence so recently, regulation has been slow to catch up to the ways in which this tax program is rapidly attracting capital from private equity, investment banks, and even real estate crowdfunding platforms. While the program purports to improve underdeveloped areas of the United States, in practice the dearth of guidelines directing these investments perpetuates a black hole of information surrounding the risk and reporting of the investments, and also invokes securities laws as merely a minimum threshold, rather than meaningfully regulating how and with whom the funds can invest. This Note suggests that greater mandated disclosure requirements, and an extension of the tax incentives to investments only in particular kinds of projects—those that actually advance the goals envisioned by the TCJA provision—would improve the program’s efficacy and protect investors across the spectrum.