Qualified Opportunity Fund (QOF) investments can provide a viable remedy, and perhaps the only salvation, for "botched" 1031 exchanges. In the process of implementing the QOF investment, there are several pluses, minuses and caveats to consider. Whereas in a Section 1031 you must invest the entire proceeds realized in a sale to achieve a complete gain deferral, with a QOF you need only invest the amount which is treated as capital gain. This raises the point that with a Section 1031 exchange you are able to defer depreciation recapture (which does retain its character), but going the QOF route does require recognition of recapture as ordinary income such that only the portion of gain that comprises capital gain may be deferred via the QOF mechanism. Whereas in the case of Section 1031 exchange, you have no geographical limitations but strict restrictions on what constitutes like kind property, the QOF route has fewer investment restrictions but does require that the QOF have its trade or business located in a Qualified Opportunity Zone. Finally, while Section 1031 allows for investment in triple-net (NNN) leased real estate, NNN-leased property does not qualify for purposes of a QOF. In addition, you will no longer need the services of a Qualified Intermediary (QI) to hold the funds in escrow. The QOF option also provides a longer reinvestment period than Section 1031, in that it gives you 180 days including the date the gain is realized. However, it's likely that the Section 1031 disposition comprises Section 1231 property, in which case the proposed regulations provide that the 180-day period by which gain must be reinvested in a qualified opportunity fund with respect to any section 1231 capital gain begins on the last day of the taxpayer's taxable year, not the date of the sale giving rise to the gain. This rule follows the logic that net capital gain from Section 1231 property is determinable only as of the last day of the year. While the foregoing explanation is designed to cover main issues, it is not intended to cover each and every detail which may affect your specific transaction. In terms of what procedures you are required to follow, compliance requirements are quite complex, especially if you go about to create your own QOF, such that I highly recommend you seek legal/tax counsel customized to your specific transaction.