Now Available: The Opportunity Zones Playbook
OZ 2.0 Superwebinar
The Opportunity Zone 2.0 map is being redrawn right now — and the IRS just dropped the rules for the OZ 1.0 to 2.0 transition.
In this OZ 2.0 Superwebinar, Jimmy Atkinson breaks down the OZ 2.0 designation guidance (Rev. Proc. 2026-14), the brand-new transition rules (IRS Notice 2026-40), and where all 56 states and territories stand in the nomination process, plus a live demo of the new OZ 2.0 eligibility map.
Featured on This Episode
- Download the OZ 2.0 Superwebinar presentation deck
- IRS Rev. Proc. 2026-14
- IRS Notice 2026-40
- Opportunity Zones Map
- Opportunity Zones Tax Benefits Calculator
About The Opportunity Zones Podcast
Hosted by OpportunityZones.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.
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Episode Summary
The Nomination Window Is Officially Open
Jimmy Atkinson, founder of OpportunityZones.com and author of the brand new book The Opportunity Zones Playbook, recorded this OZ 2.0 Superwebinar on July 7, 2026, at what he called “a really opportune time.” Just one week earlier, on July 1, the determination period, more commonly known as the nomination window, officially opened.
Over this 90 to 120 day period, the governors of every state, the governors of the overseas territories, and the mayor of Washington, DC will submit their official nomination lists of census tracts to the Treasury Department.
Jimmy structured the session to set the stage on why OZ 2.0 matters right now, cover the new eligible universe, walk through the nomination process and the transition from OZ 1.0 to OZ 2.0, explain off-list tract nominations, and close with strategic implications, key takeaways, and live audience Q&A.
From Temporary Program to Permanent Fixture
Jimmy opened by zooming out. Opportunity Zones were first introduced in Congress back in 2015 by Senator Cory Booker, a Democrat from New Jersey, and Senator Tim Scott, a Republican from South Carolina and the author of the foreword to Jimmy’s book. The concept was packaged into the Tax Cuts and Jobs Act and became part of the tax law in December 2017.
The main problem with the original program was that it was always meant to be temporary, expiring at the end of 2026. That changed on July 4, 2025, when the One Big Beautiful Bill Act was enacted, making Opportunity Zones permanent. New Opportunity Zones will now be designated every ten years: nomination processes get underway in years ending in six, and new zones take effect in years ending in seven.
Two documents govern the current process. IRS Revenue Procedure 2026-14 governs how OZ 2.0 zones are nominated and designated, and IRS Notice 2026-40, released just weeks before this recording, covers the transition rules bridging OZ 1.0 to OZ 2.0.
Jimmy also highlighted a unique quirk. Because the original zones remain in effect through the end of 2028 while OZ 2.0 zones take effect January 1, 2027, there will be a two-year overlap, the only time in the history of Opportunity Zones that this will happen.
The Three OZ 2.0 Tax Benefits for Investors
For newcomers, Jimmy offered the ten-second elevator pitch: Opportunity Zones provide a tax break to wealthy investors with capital gains, as long as they roll those gains into low-income communities and hold those dollars there for at least ten years.
For gains rolled into a qualified opportunity fund (QOF) within 180 days, with the investment taking place on or after January 1, 2027, there are three big incentives. First, a five-year deferral period on recognition of the gain. Second, a 10% basis step-up, which rises to 30% for investors in a qualified rural opportunity fund that deploys into rural Opportunity Zone projects.
Third, the same ten-year benefits that applied in the previous program: hold for at least ten years, and there is no tax on the appreciation of the Opportunity Zone investment and no depreciation recapture. These benefits are covered in depth in chapters two and three of the book, in the foundations section.
A Tighter Low-Income Community Definition
OZ 1.0 was more generous in how it defined a low-income community. A census tract qualified if its median family income (MFI) was 80% or less of the surrounding area’s or statewide median. That threshold has been revised down to 70%, shrinking the pool of eligible tracts.
The second path to qualification, a poverty rate of 20% or greater, remains, but now carries a cap. If the tract’s median family income sits at or above 125% of the area or statewide median, it is disqualified. Jimmy explained the reasoning with the classic example of census tracts near college campuses, where pockets of student housing produce high poverty rates alongside very high median family incomes.
The dataset has been updated too. Eligibility is fixed to the 2020 through 2024 American Community Survey (ACS) five-year estimates, locking the map to that data vintage for the full cycle. The non-low-income contiguous tract provision has been eliminated, and roughly 60% of today’s OZ 1.0 tracts are fully eligible for redesignation under the new definition.
A Smaller, More Focused Map
Heading into OZ 2.0, there are a little more than 25,000 eligible tracts, over 8,000 of them rural, or about a third. Each state is typically allowed to nominate only 25% of its low-income tracts. That will whittle the map down from the 8,764 zones designated today to approximately 6,544 anticipated OZ 2.0 designations, a 25% reduction.
Once designated and certified by the Treasury Department, those zones are locked for a ten-year period.
Only four jurisdictions actually gain zones: Louisiana picks up five, the US Virgin Islands picks up four, New Mexico picks up two, and Mississippi picks up one. Puerto Rico experiences the steepest reduction, falling 79% from 863 zones to 178.
The first time around, Congress wrote a special rule granting Puerto Rico designation of 100% of its low-income tracts rather than 25%. Puerto Rico’s tracts are also set to expire at the end of 2027, one year early, due to a technicality Jimmy has covered on the podcast and in an article for Tax Notes.
How the Nomination Process Works
Only governors’ offices can submit nominations; there are just 56 offices allowed to go straight to the Treasury Department, all routed through Treasury’s nomination tool at OpportunityZones.gov. Developers, investors, and community development entities need to go to their city, county, or state instead.
The determination period is a ninety-day window closing September 28, 2026. But the statute grants Treasury the ability to extend it by up to thirty days for any state that requests it, taking the window out to October 28.
After that, Treasury has a thirty-day consideration period, also extendable by thirty days, making December 27, 2026 the latest possible certification date. Jimmy suspects the bulk of certifications will come late November through late December. Governors can revise their slates any time before the window closes, and as of this recording, no state had yet published its nominations.
Where All 56 Jurisdictions Stand
For the state-by-state picture, Jimmy credited Frances Kern Mennone at FBT Gibbons, who “has her finger on the pulse of what’s happening in all 56 of these jurisdictions,” with data current as of July 2, 2026. Twenty-eight jurisdictions have already closed their nomination periods, twelve are actively receiving nominations (eight with open windows plus four in progress), and sixteen have said nothing about OZ 2.0 at all.
Jimmy spotlighted examples. California’s window is open with a July 25 community deadline through the GO-Biz website, and the state is anticipated to drop from 879 zones to 618. Florida closed over a month ago and must select 340 nominations.
Illinois closed unusually early on April 24. Maryland’s window runs all the way to August 7. Ohio’s window was closing within three days of the recording, and Texas has said it will submit its nominations on or before August 3.
Small States, Territories, and the 25-Tract Floor
Congress wanted every state to have at least 25 Opportunity Zones, which Jimmy compared to every state getting two senators regardless of population. States with fewer than 100 eligible tracts are capped at a quantity of 25 rather than 25%, which is why Alaska, Delaware, the District of Columbia, and Hawaii land at exactly 25.
New this round: some jurisdictions have fewer than 25 eligible tracts, in which case all of them can be nominated. Vermont has 24, Wyoming has 20, the US Virgin Islands has 18, the Northern Mariana Islands has 19, American Samoa has 16, and Guam has 20.
Jimmy raised an intriguing wrinkle for these jurisdictions. Could Vermont or Wyoming find additional tracts not on Treasury’s official list and argue them in through the off-list pathway?
A Live Tour of the Brand New OpportunityZones.com Map
In a session highlight, Jimmy gave the first public walkthrough of the brand new mapping tool at OpportunityZones.com/map, taking live audience requests. The map offers street view, dark mode, satellite mode, and rural shading. Clicking any tract reveals its tract number, full eleven-digit geo ID, designation status, rural classification, poverty rate, and median family income as a percentage of the area or statewide median.
Layers include current Opportunity Zones, OZ 2.0 eligible tracts, and a “fate view” showing whether an OZ 1.0 tract is eligible for redesignation. Jimmy toured Laurel, Mississippi; Fort Worth and the DFW Metroplex; and Puerto Rico, where only 712 tracts are OZ 2.0 eligible and just 178 can be nominated.
He also visited Vermont and Wyoming; Clear Creek County, Colorado, where a tract at 79.9% of area MFI would have just barely qualified under the old 80% rule but misses the new 70% threshold; an affluent Atlanta address at 153% of the metro’s median family income; Orlando and Orange County, Florida; and Gwinnett County, Georgia. One Puerto Rico tract proved only 55.6% eligible for redesignation because the Census Bureau split the 2010 tract into two for the 2020 census.
Rural tracts carry two advantages: a 50% substantial improvement threshold instead of 100%, and the 30% basis step-up for qualified rural opportunity fund dollars.
IRS Notice 2026-40 and the OZ 1.0 to 2.0 Transition
Notice 2026-40 is not final regulations but a notice of forthcoming regulations that can be relied upon in the meantime. It confirmed that OZ 1.0 investors still have a deferral date of December 31, 2026, and that the gain cannot be deferred again into a new Opportunity Zone deal. It also confirmed that pre-2027 gains invested after January 1, 2027 receive the full OZ 2.0 package.
Jimmy walked through an example. Sell an asset on August 1, 2026, generating a $1,000,000 eligible gain, then wire funds into a qualified opportunity fund on January 15, 2027, within the 180-day window. At the 23.8% rate most capital gains are taxed at, that gain would ordinarily produce a $238,000 tax liability due April 15, 2027.
Instead, recognition is deferred five years from the investment date, to January 15, 2032. And only $900,000 is recognized thanks to the 10% basis step-up, or $700,000 in a rural fund, with the tax bill due April 15, 2033.
Hold through January 15, 2037, and the ten-year benefit kicks in. If the $1,000,000 grows to $2,500,000, that $1,500,000 of appreciation is excluded from capital gains entirely.
New Money, Old Zones: The Working Capital Safe Harbor Twist
The notice also delivered a twist Jimmy described as “quite restrictive” for new money going into old zones. Dollars can flow in 2027 and 2028 into OZ 1.0 projects, but the underlying business must have a working capital safe harbor plan adopted by the end of 2026, with 10% of that working capital received and 5% deployed before year-end.
Passive LPs in professionally managed funds have less to worry about. But sponsors raising capital for their own deals absolutely need to seek advice from legal counsel and a CPA. The industry is working with Treasury to push for a more lenient deadline.
Existing OZ 1.0 investors do get a long runway: the fair market value step-up election remains available through December 31, 2047.
Jimmy also addressed the 2026 “dead zone” question of investing now versus waiting. Waiting earns the new five-year deferral and basis step-up. Investing now starts the ten-year clock sooner, offers certainty about where the zones are, and locks in known 2026 tax rates.
Off-List Nominations and What It All Means for You
On off-list tract nominations, Jimmy was blunt: the only winning argument is that the census data is wrong, backed by your own data showing the tract meets the 70% MFI test or the 20% poverty rate test. Arguments about jobs, revitalization, or housing will not move Treasury, and approvals will be very rare.
For investors, 40% of current Opportunity Zones are not fully re-eligible, so confirm eligibility. Active investors should go to their states now even if windows have expired, while passive investors can take a wait-and-see approach.
Developers should audit their pipelines against the new eligible list using the map. Community leaders should bring tract-level data, narratives, and private sector support to their governors’ offices.
OZ 2.0 also expands fund reporting requirements. Funds now need to report the types of businesses they invest in, the number of residential units constructed if applicable, and average monthly full-time employees.
Audience Q&A: Exits, Liquidity, and the Five-Year Tax Bill
In Q&A, Jimmy fielded questions on ten-year exits and liquidity. Opportunity Zones are highly illiquid, exotic alternative investments that are not for everyone, a topic covered in chapter four of the book. Most development deals start cash flowing in year three or four, though some newer investment types cash flow from day one.
On the five-year tax bill, Jimmy argued the burden of planning falls on the investor, not the fund. Investors should not assume a fund will have cash available at the five-year mark, especially after pandemic-era interest rate hikes derailed many OZ 1.0 refinance projections.
The episode closed with pointers to the Opportunity Zone investment tax calculator at OpportunityZones.com/calculator and the podcast at OpportunityZones.com/podcast.