When investing in a QOZ fund, investors must consider their ongoing obligations for tax reporting, particularly if they are using the program as a tool to diversify their portfolio into real estate. Many funds are structured as partnerships which produce K-1 tax obligations at the federal level and often require tax filings in states where properties are located, even if it is not the investor’s state of residence. These obligations can be time-consuming and expensive for tax preparation. Other structures, including REITs and other corporate structured entities, will produce 1099s, a much simpler tax form, though they may not get the benefit of partnership tax treatment. Understanding these differences and how they fit into your portfolio is important for you and your tax advisor.