Ok, I have done some more research. Again, I am not a CPA, just a retired Federal Auditor who understands the tax law. Check with your tax professional. But here is what I found.
The IRS rule is that if your QOF liquidates before December 31, 2026 (as mine is going to), then your deferral period ends. You are hosed and have to claim the gain. BUT! There's more!
You CAN.... "redefer." You have 180 days from the date your QOF is liquidated to re-invest. BUT! Your 10 year holding period begins the date you "re-defer." And the bad news. If you previously qualified for 15% exclusion (holding it 7 years) or a 10% exclusion (holding it five years), then you will lose those exclusions. Because your "re-deferral" date will be, oh, now, and between now and 2026, not long enough to qualify. BUT!!!! There's more.
There is a bill pending in Congress to extend the date to 2028. The couple of companies I talked to for re-investing are confident the bill will pass (barring any more Speaker of the House issues!!!!). So..... if you are in the situation I am in (where your QOF is liquidating early), you will lose your 15% exclusion, but if you re-invest before the end of 2023, you may barely squeak by to qualify for the 10% exclusion (holding for five years).
I got in too late to qualify for the 15% exclusion but I was eligible for the 10% exclusion. So for me it's crossing the fingers and hoping the law is extended so I can still get my 10% exclusion.
