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Updated over 1 year ago on . Most recent reply

How to structure sponsor promote as Capital Gains?
Here's the structure in our current operating agreement:
Investors get a 6% pref and everything beyond is split 50/50 between investors and sponsor (aside: split is very favorable to sponsor because sponsor brought 75% of capital and personally guaranteed the loan).
Since all original capital has been returned to investors, sale proceeds will be split 50/50 between investors and sponsor.
What I'd like is for the promote to be considered capital gains so it can be invested tax deferred into an Opportunity Zone Fund.
How can I achieve this?