Opportunity Zone
Encourage long-term private investment in low-income and distressed communities
5 Years
10%
Step-up in basis
7 Years
15%
Step-up in basis
10+ Years
0%
Tax on OZ gains
How Opportunity Zones Work
Realize Capital Gain
Sell an appreciated asset (stocks, real estate, business) and realize a capital gain.
Invest Within 180 Days
Reinvest the gain into a Qualified Opportunity Fund (QOF) within 180 days of the sale.
Defer Original Gain
The original capital gain is deferred until the earlier of when the OZ investment is sold or December 31, 2026.
Exclude New Gains
If held for 10+ years, pay zero capital gains tax on the appreciation of the OZ investment itself.
Program Details
Established
2017 (Tax Cuts and Jobs Act)
Administered By
U.S. Treasury
Eligible Projects
Real estate development, business investments, infrastructure
Target Areas
Census tracts nominated by states and certified by Treasury
Compliance
Investments must be in designated Opportunity Zones via QOFs
Best Use Case
Long-term investments in underserved communities with significant tax benefits
⚠️ Important Timeline
The original capital gain deferral ends on December 31, 2026. After this date, the deferred gain becomes taxable regardless of whether you sell your OZ investment.
Note: The 10% and 15% step-up in basis benefits were only available for investments made by December 31, 2019 and 2021 respectively. New investments can still benefit from the 10-year gain exclusion.
Have Capital Gains to Invest?
Find Opportunity Zone projects and QOFs to maximize your tax benefits.