The Pearl Bitcoin Fund offers a unique tax advantage that is unavailable through other Bitcoin investment vehicles. While standard direct Bitcoin investments and indirect Bitcoin exposure through securities such as ETFs require paying capital gains taxes when you sell Bitcoin or Bitcoin-related securities, our fund structure allows investors to achieve tax-free Bitcoin's value growth after the required 10-year holding period.

Yes and no. Pursuant to the initial enactment of IRC Section 1400Z Opportunity Zones (OZ 1.0) the tax code requires the initial deferred capital gains to be recognized on December 31, 2026 and processed into your TY2026 income tax return. Then, if QOF qualifying investments (securities issued by the Pearl Bitcoin Fund) are held 10 years or longer, all realized capital gains thereafter will be tax-free through December 31, 2047.

Tax revenue: Billions of dollars of tax revenue is locked up by Bitcoin holders with unrealized capital gains who don’t want to sell Bitcoin holdings due to capital gain tax liabilities. To access the OZ tax benefits, investors need to realize capital gains on their short-term and long-term investments, execute a Rollover Capital Gain transaction in the Pearl Bitcoin Fund, a qualified opportunity fund. The reward is tax-free capital gain associated with the QOF qualifying investment for long-term investors in exchange for deferred taxable gross income recognition in TY2026 and the delayed payment of tax liability to the US Treasury.

Jobs: The combination of The Pearl Bitcoin Fund, positioned as a significant source of equity capital to the Pearl Bitcoin Company, is an ideal structure to create long-term, well-paying jobs in Opportunity Zones. OZ 1.0 creates the tax incentive for US taxpayers to hold their QOF qualifying investments for 10+ years to achieve tax free capital gains through December 31, 2047.

The Pearl Bitcoin Fund offers exceptional benefits for generational wealth transfer. If an investor dies, their heirs inherit both i) the QOF qualifying investment interest at tax cost basis and excluded from fair market value mark-to-market step up procedures in death estate tax settlement, and ii) continuity of the accumulated holding period. This means if the deceased person has already held their qualifying investment interest for five years and passes it to their heirs, then the heirs only need to hold it for another five years to receive the continuous tax-free capital gain benefits thereafter through December 31, 2047—both features rarely found in inheritance tax law.

The Pearl Bitcoin Fund is designed for accredited investors who already understand Bitcoin's commercial potential and are looking for tax-efficient ways to increase their exposure to Bitcoin. It's particularly well-suited for long-term investors with a generational wealth perspective who want to preserve and maximize capital values across multiple generations free from both inclusion in taxable gross income and future capital gain tax rate uncertainty.

Pearl Bitcoin Fund investors will incur a 1% entrance fee and a 2% exit/redemption fee. They will also indirectly incur a 0.60% annual asset management fee based on the spot market value of Bitcoin held at the Pearl Bitcoin Company.

Item descrYes. The minimum initial investment required from a new Member is $500,000, and the minimum additional investment required from an existing Member is $250,000. The Managing Member may, in its sole discretion, adjust these minimum investment amounts from time to time and may accept Capital Contributions that are below the stated minimums.

The firm has engaged Deloitte as its tax advisor to prepare the annual federal and state tax returns for the Pearl Bitcoin Fund and the Pearl Bitcoin Company.

The Pearl Fund Management Company, managing member of both the Pearl Bitcoin Fund and Pearl Bitcoin Company, has executed a Bitcoin custody agreement with Anchorage Digital Bank, the only federally chartered crypto bank in the U.S. Other Anchorage customers include many of the ETFs (i.e. Blackrock), Hedge Funds, venture capital funds, governments and corporations.

Yes, the Pearl Bitcoin Fund has engaged HC Global Fund Services .  HC Global specializes in funds like ours and it has a global footprint with over $40 billion in Assets under Administration (AUA). Included within a wide  scope of contractual administration services, it will produce & send quarterly account statements to Fund investors.

The fund will have an independent audit of annual financial statements once it has operated for one full calendar year . The independent auditor’s report will be provided to investors. The independent auditor will be selected at a later date.

While the tax-free capital gain tax benefit requires a +10-year hold of the Pearl Bitcoin Fund qualifying investment, our Fund structure allows for monthly redemptions as determined by each investor. You can harvest return of capital and capital gain/loss earlier if needed, and then you will pay a 5% early withdrawal penalty and recognize capital gain/loss into taxable gross income.

This flexibility is unusual for long-term investment vehicles and gives investors greater control over their capital when their circumstances change in the pursuit of liquidity.

Unlike speculative crypto funds, the Pearl Bitcoin Fund and the Pearl Bitcoin Company employ institutional-grade security, and compliance measures that are SOC type I & II compliant and subject to review within the scope of the independent auditor’s procedures.

Bitcoin can only be withdrawn with multiple advanced biometrics and behavioral analytics approvals. Operations require a quorum of approvals, and multiple approvals from the institutional custody firm.

Your investment is protected by Anchorage Digital Bank, with comprehensive auditing and transparent practices and segregation of Bitcoin assets from the institution’s balance sheet in case of bankruptcy.

We implement a straightforward "Bitcoin buy and hold" strategy focused on long-term capital value growth rather than complex, finite-term trading tactics.

No. Our approach is based on clearly defined elements of the Internal Revenue tax code. Unlike complex tax avoidance schemes designed by the tax professional sector, the Opportunity Zone provisions we utilize are codified in the Internal Revenue Code since 2018 and made permanent in the Big Beautiful Bill in 2025. There's no regulatory gray area to navigate—we're simply implementing an established tax incentive program we have used since 2019 with our venture funds and are now implementing with the Pearl Bitcoin Fund.

The underlying business model is investor-centric.  The Pearl Bitcoin Company is designed to accommodate the Bitcoin investment strategies of each direct investor, and indirect investors through the Pearl Bitcoin Fund. Investors control their investment appetite for Bitcoin-linked equity returns, the duration of their investment, and the return of capital and profits.

No long-term investment capital lockup. Unlike real estate and private equity funds, the Pearl Bitcoin Company does not enforce any long-term capital lock-up while holding investors hostage and hoping for a liquidation event at some unknown future date.  

Services supported by real people. BTC asset management services are at the core of the business model. Real people servicing the Company's investors and customers in their pursuit to maintain and manage an investment position in Bitcoin. Full transparency, institutional custody, institutional administrator, audited financial statements, customer account statements and human customer service managers.  Not a technology black box run by computers and customer service text bots.

Most states mirror the tax benefits package that is available  under the federal OZ code and regulations. A breakdown of each state’s tax policy relative to the federal Opportunity Zone program can be found here to identify their conformity to the Federal OZ tax provisions.

The Pearl Bitcoin Company will be based in an OZ-designated census tract in Harlem, New York City.

With the OZ v1.0 scheduled to conclude at the end of 2026, there is increased urgency for investors seeking these unique tax benefits. Additionally, as more investors become aware of this tax-free Bitcoin investment structure, similar funds may emerge—though our experience with Opportunity Zone investing since the OZ program's inception gives us a significant advantage in implementation.

 Due to the anticipated size of the Company, it will not be buying Bitcoin from exchanges but will instead have the ability to select from a number of OTC desks. At each purchase (or sale) we will determine the best price and execution from multiple OTC desks at that particular point in time.

A US taxpayer is eligible to receive the potential tax benefits of IRC Section 1400Z Opportunity Zones to the extent the US taxpayer invests eligible short-term and long-term capital gain realized (i.e., Rollover Capital Gain) from the sale to, or exchange with, an unrelated person of any property held by such US taxpayer within 180 days of the date of such sale or exchange, or later dates in some cases. Eligible capital gain does not include certain gains from “section 1256 contracts.” With respect to property held indirectly by a qualified stockholder through interests in partnerships or other pass-through entities for U.S. federal income tax purposes, the Code provides that a qualified investor is eligible to receive the potential benefits of IRC Section 1400Z Opportunity Zones to the extent the US taxpayer invests eligible capital gain realized from an indirect sale through such an entity, but only if such pass-through entity does not elect to defer the gain at the entity level and the gain is from a sale to, or exchange with, a person unrelated to the pass-through entity investor and such passthrough entity. To the extent a US taxpayer wishes to invests capital gain realized from the sale to, or exchange with, an unrelated person of property held indirectly (through, for example, such entities listed above), the 180-day Rollover Capital Gains window may begin later than the date of the sale or exchange.

Note that the Rollover Capital Gain amount is solely anchored to the capital gain amount, not the total proceeds from the sale of capital assets. Currently, the US taxpayer receives a tax benefit to delay the recognition of the capital gain into taxable gross income until tax year 2026, which implies the settlement of any associated tax liability in tax year 2027. This is effectively an +1 year interest-free loan from the US Treasury. The Pearl Bitcoin Fund offers special redemption rights for its investors to exercise redemption rights to accumulate cash to pay for tax liabilities associates with their investment into the Pearl Bitcoin Company. Consult your tax accountant to determine the capital gain amount from the sale of a capital asset in a timely manner.

How does the Internal Revenue Service classify Bitcoin?

The IRS classified Bitcoin as a Digital Asset, Property, and a Capital Asset when Bitcoin is used for investment purposes. Bitcoin is not a Capital Asset if Bitcoin is received as a digital asset in exchange for goods or services in a business context. A Digital Asset means any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.

How does Bitcoin fit within the context of the Opportunity Zone code and regulations?

Pearl Bitcoin Fund, a qualified opportunity fund (QOF), may i) invest in Qualified Opportunity Zone Business Property and/or ii) acquire new issue equity securities from corporations and partnerships that are classifiable as Qualified Opportunity Zone Businesses. Qualified Opportunity Zone Business Property is a term reserved for tangible property so therefore the Pearl Bitcoin Fund may not directly acquire and own Bitcoin since it is not Tangible Property.

Pearl Bitcoin Fund will purchase new issue equity securities of the Pearl Bitcoin Company. The Company acquires Bitcoin for investment purposes to serve as the core equity capital of the Company’s capital stack.

The Opportunity Zone codes and regulations do not stipulate any minimum Tangible Property content to validate a QOZB.

Each taxable year, a qualified opportunity zone business (“QOZB”) must earn at least 50 percent of its gross income from business activities within a QOZ.  The regulations provide four safe harbors that a business may use to meet this test.  These safe harbors take into account any of the following—

1.     Whether at least half of the aggregate hours of services received by the business were performed in a QOZ; or

2.     Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or

3.     Whether necessary tangible property and necessary business functions were located in a QOZ, or

4.     A determination based on facts and circumstances.

According to 26 U.S. Code § 61 - Gross income defined--gross income means all income from whatever source derived, including gross income derived from business and gains derived from dealings in property. We expect that well over 50% (and most likely 100%) of the QOZB gross income is directly associated with the QOZB business activities performed in a Qualified Opportunity Zone. Additionally, the QOZB is expected to be eligible to employ one or more of the four safe harbor provisions to support the QOZB’s contention that it satisfies the 50 percent-of-gross income test, since it will hire people and contractors to perform QOZB services in the Qualified Opportunity Zone.

According to 26 U.S. Code §1400Z-2(d)(2)(D)(i), the term “qualified opportunity zone business property” means tangible property used in a trade or business of the qualified opportunity fund (or qualified opportunity zone business) if-

(I) such property was acquired by the qualified opportunity fund (or qualified opportunity zone business) by purchase (as defined in section 179(d)(2)) after December 31, 2017,

(II) the original use of such property in the qualified opportunity zone commences with the qualified opportunity fund (or qualified opportunity zone business), or the qualified opportunity fund (or qualified opportunity zone business) substantially improves the property, and

(III) during substantially all of the qualified opportunity fund’s holding period for such property, substantially all of the use of such property was in a qualified opportunity zone.

Tangible property has form and physical substance, and it can be touched and moved. See IRS Digital Assets. Digital Assets, including Bitcoin, are classified by the IRS as Property, not tangible property. Therefore, Digital Assets, including Bitcoin, are not classifiable as QOZBP.

Leased real property is also classified as QOZBP in the IRC Section 1400Z Opportunity Zone regulations.

The final OZ regulations provide that Intangible Property of a qualified opportunity zone business is used in the active conduct of a trade or business in a QOZ if the following requirement is satisfied.

The use of the intangible property must be normal, usual, or customary in the conduct of the trade or business. In addition, the intangible property must be used in the QOZ in the performance of an activity of the trade or business that contributes to the generation of gross income for the trade or business.

We have already stated that the Pearl Fund Company will be engaged in the active business of Bitcoin asset management on behalf of its Members, (and the members of its Members (e.g. Pearl Bitcoin Fund)) with continuity and regularity, with the intent to generate gross income for its Members.

Then it follows that Bitcoin, which is acquired, owned and sold throughout the Company’s execution of Bitcoin asset management services, is in fact one of the primary components of the Company’s active business, and the direct ownership of Bitcoin is intended to be the primary generator of gross income for the Company’s Members (and the members of its Members).

IRIC and REIT Capital, Gain Dividends (General Rule)

• Last day of the shareholder’s taxable year in which the capital gain dividend would otherwise be recognized by the shareholder.

RIC/REIT - Undistributed capital gains RIC and REIT Capital Gain Dividends (Elective Rule)

• Notwithstanding the general rule in paragraph (b)(7)(ii)(A) of this section, a shareholder of a RIC or REIT may choose to treat the 180-day period with respect to a capital gain dividend that the shareholder receives from the RIC or REIT as beginning on the date of the dividend distribution; provided, however, that the aggregate amount of the. shareholder’s eligible gain with respect to capital gain dividends from the RIC or REIT is limited to the aggregate amount of capital gain dividends reported for that shareholder by the RIC or REIT for that shareholder's taxable year

RIC/REIT Undistributed capital gains

• The 180-day period with respect to the included undistributed capital gain begins, at the shareholder's election, on either the last day of the RIC or REIT's taxable year or the last day of the shareholder's taxable year in which the amount would otherwise be recognized as long-term capital gains by the shareholder.

180-day period for a partner electing deferral—(A) General rule.

• If a partner's distributive share includes a gain that is described in paragraph (c)(8)(ii)(C) of this section (gains that are eligible gains with respect to the partner), the 180-day period with respect to the partner's eligible gains in the partner's distributive share generally begins on the last day of the partnership taxable year in which the partner's distributive share of the partnership's eligible gain is taken into account under section 706(a).

180-day period for a partner electing deferral—(B) Elective rule. 

• Notwithstanding the general rule in paragraph (c)(8)(iii)(A) of this section, if a partnership does not elect to defer all of its eligible gain, the partner may elect to treat the partner's own 180-day period with respect to the partner's distributive share of that gain as being—

  (1) The same as the partnership's 180-day period; or

  (2) The 180-day period beginning on the due date for the partnership's tax return, without extensions, for the taxable year in which the partnership realized the gain that is described in paragraph (c)(8)(ii)(C) of this section.

Qualified 1231 gains

• A) Definition. A section 1231 gain (as defined in section 1231(a)(3)(A)) recognized on the sale or exchange of property defined in section 1231(b) (1231(b) property) is a qualified 1231 gain to the extent that it exceeds any amount with respect to the 1231(b) property that is treated as ordinary income under section 1245 or section 1250.

  The term 180-day period means the 180-day period referred to in section 1400Z-2(a)(1)(A) with respect to any eligible gain meeting the requirements of paragraph (b)(11) of this section that begins on the day on which the gain would be recognized for Federal income tax purposes if the eligible taxpayer did not elect under section 1400Z-2 and the section 1400Z-2 regulations to defer recognition of that gain.

Gain from Installment Sales

• (A) In general. The term eligible gain includes gains described in this paragraph (b)(11) that would be recognized by an eligible taxpayer under the installment method pursuant to section 453 and with §§1.453-1 through 1.453-12 for a taxable year, provided such gain otherwise meets the requirements of this paragraph (b)(11). This includes gains recognized under the installment method under section 453 from an installment sale that occurred before December 22, 2017.

  (B) For gains reported on the installment method, an eligible taxpayer may treat the date the payment on the installment sale is received or the last day of the taxable year in which the eligible taxpayer would have recognized the gain under the installment method as the beginning of the 180-day period described in paragraph (b)(7) of this section. Thus, if an eligible taxpayer receives one or more payments on an installment sale and treats the date the payment on the installment sale is received as the beginning of the 180-day period, each payment will begin a new 180-day period.

All Other Capital Gains

• The term 180-day period means the 180-day period referred to in section 1400Z-2(a)(1)(A) with respect to any eligible gain meeting the requirements of paragraph (b)(11) of this section that begins on the day on which the gain would be recognized for Federal income tax purposes if the eligible taxpayer did not elect under section 1400Z-2 and the section 1400Z-2 regulations to defer recognition of that gain.

  The 180-day period with respect to gain on the stocks, bonds, securities and digital assets begins on the trade date.