8997 Initial and Annual Statement of Qualified Opportunity Fu

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Form

8997

Department of the Treasury
Internal Revenue Service

Initial and Annual Statement of
Qualified Opportunity Fund (QOF) Investments
Go to www.irs.gov/Form8997 for the latest information.
Attach to your tax return.

Name

Part I

OMB No. 1545-0123

2022

Attachment
Sequence No. 997
Tax identification number (see instructions)

Total QOF Investment Holdings Due to Deferrals Prior to Beginning of Tax Year
If different from last year’s ending QOF investment holdings, attach explanation.

DRAFT AS OF
October 21, 2022
DO NOT FILE

(a)
Qualified
Opportunity
Fund (QOF)
EIN

(b)
Date QOF
investment
acquired
(MM/DD/YYYY)

(c)
Description of QOF investment
(for example, 100 shares or 25% interest)

(d)
Special
gain
code

1

Enter the totals, if any, from continuation sheet

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2

Enter the totals from columns (e) and (f) .

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Part II
(a)
Qualified
Opportunity
Fund (QOF)
EIN

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Deferred gain held in QOF

(e)
Amount of short-term
deferred gain
remaining in QOF

(f)
Amount of long-term
deferred gain
remaining in QOF

Current Tax Year Capital Gains Deferred by Investing in QOF
(b)
Date QOF
investment
acquired
(MM/DD/YYYY)

(c)
Description of interest acquired
(for example, 100 shares or 25% interest)

(d)
Special
gain
code

1

Enter the totals, if any, from continuation sheet

2

Enter the totals from columns (e) and (f). See instructions for reporting on Form 8949 .

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Deferred gain invested in QOF
(e)
Amount of short-term
deferred gain
remaining in QOF

(f)
Amount of long-term
deferred gain
remaining in QOF

.

Applicability of Special Rules Regarding the Waiver of Certain Treaty Benefits
Are you a foreign eligible taxpayer? See instructions for more information.
Yes. You may not elect to defer tax on an eligible gain by investing in a QOF unless you check “Yes” in response to the next
question.
No. Skip the next question and go to Part III.

Waiver of Treaty Benefits on Future Inclusions by a Foreign Eligible Taxpayer
Do you hereby irrevocably waive any benefits available under an applicable U.S. income tax convention that would exempt gains
that you are deferring by investing in a QOF from being subject to federal income tax at the time of inclusion? See instructions for
more information.
Yes. Report the deferral of the eligible gain in Part II and on Form 8949.
No. You may not elect to defer tax on an eligible gain by investing in a QOF. Do not report the deferral of any otherwise eligible
gain in Part II or on Form 8949.
For Paperwork Reduction Act Notice, see your tax return instructions.

Cat. No. 37821R

Form 8997 (2022)

Page 2

Form 8997 (2022)

Part III
(a)
Qualified
Opportunity
Fund (QOF)
EIN

Inclusion Events and Certain Other Transfers During the Current Tax Year
(b)
Date of event
(MM/DD/YYYY)

(c)
Description of event
(for example, sale of 100 shares, gift of 25% interest,
or distribution of $1,000, etc.)

(d)
Special
gain
code

Deferred gain included
due to disposition of QOF interest
(e)
Amount of previously
deferred short-term
gain now included in
taxable income

(f)
Amount of previously
deferred long-term
gain now included in
taxable income

DRAFT AS OF
October 21, 2022
DO NOT FILE

1

Enter the totals, if any, from continuation sheet

2

Enter the totals from columns (e) and (f). See instructions for reporting on Form 8949 .

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Check this box if you disposed of any investment(s) and didn’t receive a Form 1099-B reporting the disposition from the QOF or
other third party. See the Instructions for Form 8949 for reporting requirements of any gain or loss.

Part IV
(a)
Qualified
Opportunity
Fund (QOF)
EIN

Total QOF Investments Due to Deferrals at Year End (see instructions)
(b)
Date QOF
investment
acquired
(MM/DD/YYYY)

(c)
Description of interest acquired
(for example, 100 shares or 25% interest)

(d)
Special
gain
code

1

Enter the totals, if any, from continuation sheet

.

.

.

.

.

.

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.

.

.

.

.

.

2

Enter the totals from columns (e) and (f) .

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Deferred gain invested in QOF investment
(e)
Amount of short-term
deferred gain
invested in QOF

(f)
Amount of long-term
deferred gain
invested in QOF

Form 8997 (2022)

Page 3

Form 8997 (2022)

Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
Future Developments

Special gain code (SGC). An SGC is a
code that is entered when the QOF
investment originated from an elected
deferred gain, where the gain was:
SGC
A
B
C
D
E

Gain Origination
Section 1256 gain
Form 4797 (section 1231)
Straddle(s)
Collectibles
Exempt by treaty (but for
election to defer rather than
claim exemption)
Deferred gain relating to a
noninclusion transfer

Identification requirement for
acquisition from another taxpayer in a
noninclusion transfer. If you acquired
the QOF investment during the tax year
or in a prior tax year in a transaction that
was, in whole or in part, not an inclusion
event under Regulations section
1.1400Z2(b)‐1(c), provide the following
information relating to the transferor of
the QOF investment. Enter in column (c)
the taxpayer name, taxpayer
identification number, and the date the
QOF investment was transferred to you.
Enter in column (d) special gain code “F.”

DRAFT AS OF
October 21, 2022
DO NOT FILE

For the latest information about
developments related to Form 8997 and
its instructions, such as legislation
enacted after they were published, go to
www.irs.gov/Form8997.

Purpose of Form

The Tax Cuts and Jobs Act (TCJA),
section 13823, added section 1400Z-1
to provide for the designation of certain
census tracts as qualified opportunity
zones (QOZs) and added section
1400Z-2 to provide certain benefits for
investments in these QOZs through
investment in qualified opportunity funds
(QOFs). Taxpayers that invest in QOZ
property through a QOF can defer the
recognition of certain gains. See
Definitions, later.
An investor in a QOF uses Form 8997
to inform the IRS of the QOF
investments and deferred gains held at
the beginning and end of the current tax
year, as well as any capital gains
deferred by investing in a QOF and QOF
investments disposed of during the
current tax year. See www.irs.gov/
Ozfaqs for more information and
guidance.

Definitions
Qualified opportunity fund (QOF). A
QOF is an investment vehicle organized
as a corporation or a partnership for the
purpose of investing in QOZ property
(other than another QOF) that holds at
least 90% of its assets in QOZ property.
See the Instructions for Form 8996 for
more information.
Qualified opportunity fund (QOF)
investment. A QOF investment is an
investment of eligible gain into a QOF to
defer recognition of the eligible gain. The
investment in the QOF must be in the
form of an equity interest in the QOF,
which may include preferred stock or
partnership interests, including those
with special allocations. Generally, the
investment in the QOF must have
occurred within the 180-day period
beginning on the date the gain would be
recognized for federal income tax
purposes if the eligible taxpayer didn’t
elect to defer recognition of that gain. A
QOF investment is also reported on
Form 8949; other non-qualifying
investments in the entity certified as a
QOF are not reported on Form 8997.

F

Who Must File

An eligible taxpayer holding a QOF
investment at any point during the tax
year must file Form 8997 with the
taxpayer’s timely filed federal income tax
return (including extensions). An eligible
taxpayer is a person that is required to
report the recognition of gains during the
tax year under federal income tax
accounting principles. If you are not
otherwise required to file a return, with
exception of grantor trusts, but you are
an eligible taxpayer who held a QOF
investment at any point during the tax
year, attach Form 8997 to an appropriate
return, such as Form 1040-NR or Form
1120-F, with your name, address, and
identification number.
Instructions for consolidated groups.
A consolidated group should include
with the group’s return a separate Form
8997 for each group member that held a
QOF investment during the tax year.

Specific Instructions
Name and Address
Print or type the information in the
spaces provided.
Taxpayer identification number. If you
are an individual, enter your social
security number (SSN) or your individual
taxpayer identification number (ITIN). For
C corporations, partnerships, S
corporations, trusts (non-grantor trusts),
estates, and Indian tribes, enter the
employer identification number (EIN).

Part I
Complete Part I to declare your QOF
investments held at the beginning of the
current tax year; for individuals, this
would generally be January 1, 2022.
Complete columns (a) through (d) for
each QOF investment. When reporting
the amount of the deferred gain, use the
appropriate column (either (e) or (f))
depending on whether the remaining
deferred capital gain in the fund was a
short-term or a long-term capital gain.

Identification requirement for transfer
to another taxpayer in a noninclusion
transfer. If you disposed of a QOF
investment during the tax year in a
transaction that was, in whole or in part,
not an inclusion event under Regulations
section 1.1400Z2(b)‐1(c), provide the
following information relating to the
transferee of the QOF investment. Enter
in column (c) the taxpayer name, taxpayer
identification number, and the date the
QOF investment was disposed of. Enter
in column (d) special gain code “F.”

Part II
Complete Part II to report your capital
gains for the current tax year that were
deferred by investing in a QOF.
Complete columns (a) through (d) for
each QOF investment. When reporting
the amount of the deferred gain, use the
appropriate column (either (e) or (f))
depending on whether the capital gain
deferred was a short-term or a long-term
capital gain.
Identification requirement for
acquisition from another taxpayer in a
noninclusion transfer. If you acquired
the QOF investment during the tax year
in a transaction that was, in whole or in
part, not an inclusion event under
Regulations section 1.1400Z2(b)‐1(c),
provide the following information relating
to the transferor of the QOF investment.
Enter in column (c) the taxpayer name,
taxpayer identification number, and the
date the QOF investment was
transferred to you. Enter in column (d)
special gain code “F.”
Identification requirement for transfer
to another taxpayer in a noninclusion
transfer. If you disposed of a QOF
investment during the tax year in a
transaction that was, in whole or in part,
not an inclusion event under Regulations
section 1.1400Z2(b)‐1(c), provide the
following information relating to the
transferee of the QOF investment. Enter
in column (c) the taxpayer name, taxpayer
identification number, and the date the
QOF investment was disposed of. Enter
in column (d) special gain code “F.”

Page 4

Form 8997 (2022)

Waiver of Treaty Benefits on
Future Inclusions by a
Foreign Eligible Taxpayer

excepted from being inclusion events.
See Regulations section 1.1400Z2(b)-1(c)
for a full list of inclusion events and
exceptions.

If you are a foreign eligible taxpayer (an
eligible taxpayer that is not a U.S. person
within the meaning of section 7701(a)(30)
or that is treated as a resident of another
country for purposes of an applicable
income tax treaty) you must, for any
capital gains that you are deferring by
investing in a QOF, irrevocably waive any
benefits available under an applicable
U.S. income tax convention that would
exempt such gains from being subject to
federal income tax at the time of
inclusion. A foreign eligible taxpayer
includes, for example, any individual who
is required to file Form 1040-NR, a
foreign corporation, and a foreign estate
or trust. A citizen or resident alien of the
United States who is required to file
Form 1040 or 1040-SR is not a foreign
eligible taxpayer. To waive treaty
benefits, a foreign eligible taxpayer must
check the “Yes” box provided on page 1
of Form 8997 under Waiver of Treaty
Benefits on Future Inclusions by a
Foreign Eligible Taxpayer.

Complete columns (a) through (c) for
each QOF investment. When reporting
the amount of the deferred gain now
included, due to the inclusion event,
complete column (d) and report the
amount of the gain in the appropriate
column (either (e) or (f)) depending on
whether the previously deferred capital
gain was a short-term or a long-term
capital gain. If your transaction falls
under an exception in the regulations so
that no deferred gain is now included,
enter in column (c) the word “Exception”
and a citation to the applicable
paragraph of the regulations; leave
columns (d)–(f) blank.

deferrals and prior tax year(s) deferrals;
for individuals, this would generally be
December 31, 2022. Complete columns
(a) through (d) for each QOF investment.
When reporting the amount of the
deferred gain, use the appropriate
column (either (e) or (f)) depending on
whether the deferred capital gain was a
short-term or a long-term capital gain.

DRAFT AS OF
October 21, 2022
DO NOT FILE

Note: The waiver of treaty benefits on
Form 8997 generally doesn’t apply to
partnerships. See Regulations section
1.1400Z2(a)-1(b)(11)(ix)(A)(3).

Part III
Complete Part III to report inclusion
events during the current tax year for
your QOF interests. An inclusion event
occurs if you sold or transferred your
QOF investment, if you received a
distribution from the QOF, if you
declared your QOF interest worthless, if
the QOF ceased to be a QOF, or if you
or the QOF engaged in certain other
transactions. Some transactions are

Check the box in Part III if you
disposed of a QOF investment during
the current tax year and didn’t receive a
Form 1099-B from the QOF or other third
party reporting the disposition.

Identification requirement for
acquisition from another taxpayer in a
noninclusion transfer. If you acquired
the QOF investment in a transaction that
was, in whole or in part, not an inclusion
event under Regulations section
1.1400Z2(b)‐1(c), provide the following
information relating to the transferor of
the QOF investment. Enter in column (c)
the taxpayer name, taxpayer
identification number, and the date the
QOF investment was transferred to you.
Enter in column (d) special gain code “F.”

Part IV
Complete Part IV to report your deferred
gain held during the tax year that was
not invested and your QOF investments
held due to current year capital gain

If one of your QOF investments is the
continuation of an investment in a
different QOF (for example, due to a
reorganization), enter in column (c) the
word “Formerly” and the earlier QOF’s
EIN.
Identification requirement for
acquisition from another taxpayer in a
noninclusion transfer. If you acquired
the QOF investment in a transaction that
was, in whole or in part, not an inclusion
event under Regulations section
1.1400Z2(b)‐1(c), provide the following
information relating to the transferor of
the QOF investment. Enter in column (c)
the taxpayer name, taxpayer
identification number, and the date the
QOF investment was transferred to you.
Enter in column (d) special gain code “F.”

Additional Investments
Attach and label a separate continuation
sheet if the number of QOF investments
to be reported on Part I, II, III, or IV
exceeds the amount of lines provided.
Transfer the deferred gains from the
continuation sheet to the line on each
part for totals from a continuation sheet
and enter the amounts in the appropriate
column (either (e) or (f)) depending on
whether the deferred capital gain
invested in the fund was a short-term or
a long-term capital gain.