Opportunity Zone Investments
- Typical userInvestors with a recent capital gain
- IRS scrutinyYellow
- Sponsors3
Overview
Reinvest a gain in a qualified opportunity fund to defer tax on it, with possible benefits on later growth.
IRS scrutiny
Accepted when documented carefully, and the IRS reviews it more often.
Rules, risks and sources
Key rules
OBBBA made the program permanent. For amounts invested after Dec. 31, 2026: deferral to the earlier of disposition or 5 years after investment; 10% basis increase after 5 years (30% for qualified rural opportunity funds); 10-year appreciation exclusion rules continue. For investments made after Dec. 31, 2026 and held at least 10 years (with the §1400Z-2(c) election), basis is generally fair market value on the date of sale if sold within 30 years of the investment date, otherwise fair market value on the 30-year date. Rural QOZ substantial-improvement threshold reduced to 50%. Investment generally within 180 days of the gain. Pre-2027 investments: deferred gain recognized Dec. 31, 2026 under prior law. Reporting rules proposed Sept. 11, 2026 (REG-116506-25; comment period closed Oct. 16, 2026). Treasury/IRS requested further comments on OBBBA opportunity zone issues in Notice 2026-55 (comments due Nov. 23, 2026); transition guidance for gains and investments spanning Dec. 31, 2026 is in Notice 2026-40.
Primary sources
- 26 U.S.C. §1400Z-2 as amended by P.L. 119-21 §70421 (LII)
- IRS Opportunity Zones page
- IRS, Working Families Tax Cuts page (formerly the One Big Beautiful Bill provisions page)
- Proposed regs: QOZ information reporting & QOF certification, 91 FR 57968 (Sept. 11, 2026; comments close Oct. 16, 2026)
- Internal Revenue Bulletin 2026-42 (Notice 2026-55, Oct. 13, 2026)
- Internal Revenue Bulletin 2026-43 (REG-116506-25 reprinted, Oct. 19, 2026)
Facts checked 2026-10-20.
Common questions
How long do I have to invest a gain in an opportunity fund?
Generally 180 days, starting on the date of the sale or exchange that produced the gain.
Source: 26 U.S.C. §1400Z-2(a)(1)
What changes for opportunity fund investments made after 2026?
Deferred gain is included no later than five years after the investment. Holding five years increases basis by 10% of the deferred gain (30% for a qualified rural opportunity fund). For investments held at least 10 years with the election, basis is generally the fair market value when sold, if sold within 30 years.
Sources: IRS Notice 2026-55 (IRB 2026-42); 26 U.S.C. §1400Z-2
Sponsors that offer this strategy
- Activated Capital, LLC Unclaimed 16/100 · Serious concerns Public record
- Belpointe PREP, LLC Unclaimed 69/100 · Mixed evidence Public record
- Fundrise Advisors, LLC (Fundrise Opportunity Fund, LP) Unclaimed 35/100 · Serious concerns Public record
Advisors who offer this strategy
- Cohen & Co Unclaimed CPA and advisory firm Public record
- KBF Advisory Unclaimed CPA and advisory firm Public record
- KSM (Katz, Sapper & Miller) Unclaimed CPA and advisory firm Public record
- Newburg | CPA Unclaimed CPA and advisory firm Public record
- RubinBrown Unclaimed CPA and advisory firm Public record