Opportunity Zone FAQs

Opportunity Zones are designated areas aimed at stimulating economic development by offering tax incentives to investors who fund projects within these zones. Investors can defer, reduce, and eliminate capital gains taxes by reinvesting in Qualified Opportunity Funds that support real estate or business development in these areas. Read more about how Opportunity Zones work.

There are four tax advantages available to Opportunity Zone investors: deferral of capital gains, partial reduction of deferred gain (for pre-2022 investments), elimination of capital gains tax after 10 years, and avoidance of depreciation recapture. These benefits make Qualified Opportunity Fund investments attractive for long-term investors looking to minimize tax liabilities. Read more about OZ tax advantages.

Yes, Opportunity Zones remain in effect as of 2025. Gains recognized before the end of 2026 are eligible for investment in Qualified Opportunity Funds (QOFs). While some early tax benefits have expired, the main advantages—like tax-free appreciation after 10 years—are still available for new investments made through 2026. Read more about key deadlines and remaining OZ benefits.

To determine if a property is located in an Opportunity Zone, use the Opportunity Zones Map provided by OpportunityZones.com. This tool helps you verify whether a specific address falls within a designated OZ, which is essential for determining investment eligibility and accessing potential tax benefits. Read more about determining where Opportunity Zones are.

If a property is located within an Opportunity Zone, it is part of a designated area eligible for tax-advantaged investments. Property owners and developers may attract investors seeking OZ tax benefits, leading to potential increases in property value and economic development. Investments must be made through Qualified Opportunity Funds. Read more about your options if you own property in an Opportunity Zone.

The 180-day rule requires investors to reinvest eligible capital gains into a Qualified Opportunity Fund (QOF) within 180 days of realizing the gain to qualify for tax benefits. In most cases, an investor’s 180-day reinvestment window starts on the date that a sale or exchange triggers a capital gain. Read more about the 180-day rule for Opportunity Zones.

The 10-year rule allows investors who hold their Qualified Opportunity Fund (QOF) investment for at least 10 years to eliminate capital gains tax on any post-acquisition appreciation. This means that after a decade, investors can sell or exchange their OZ investment(s) without paying taxes on the increased value. Read more about the 10-year rule for Opportunity Zones.

Investors in Qualified Opportunity Funds must file IRS Form 8997 annually to report their QOF investments. In the initial investment year, gain can be deferred using a combination of Forms 8949 and 8997. Depending on the type of gain, investors may also need to use Form 4797. Accurately filing these forms helps maintain compliance and secure tax benefits under the Opportunity Zone program. Read more about filing IRS Form 8997 to report Opportunity Zone investments.

Yes and no. Technically, yes, you can invest in Opportunity Zones without using capital gains. But only investments made with capital gains are eligible for any of the OZ tax benefits. Investing non-gain dollars does not qualify for deferral, reduction, exclusion, or depreciation recapture avoidance. But non-gains dollars may still support community development within an Opportunity Zone. Read more about investing non-gains dollars in Opportunity Zones.

A Qualified Opportunity Zone Fund (QOF) is an investment vehicle organized as a corporation or partnership to invest in Opportunity Zone property. QOFs provide investors with powerful capital gain tax benefits, when gains are reinvested into projects that support economic development in designated zones. Read more about Qualified Opportunity Zone Funds.

The 30-month rule requires that a Qualified Opportunity Fund (QOF) substantially improve acquired property within 30 months of purchase. This means investing an amount equal to the adjusted basis (excluding land) in improvements or rehabilitation, ensuring the property actively contributes to economic growth within the Opportunity Zone. Read more about the 30-month substantial improvement rule for Opportunity Zones.

Qualified Opportunity Zone Businesses (QOZBs) are allowed to hold working capital for up to 31 months without violating asset requirements, as long as they follow a written plan for use. This safe harbor helps maintain compliance while planning and executing long-term development projects in Opportunity Zones. Read more about the 31-month working capital safe harbor rule Opportunity Zones.

The 90% rule requires that at least 90% of a QOF’s assets be invested in Qualified Opportunity Zone Property, tested semi-annually. This rule ensures that a significant portion of the fund’s capital is actively deployed in economic development projects within designated zones. Read more about the 90% rule for Qualified Opportunity Zone Funds (QOFs).

IRS Form 8996 is used by corporations or partnerships to certify their status as Qualified Opportunity Funds (QOFs) and to demonstrate compliance with the 90% investment standard. This form must be filed annually as part of the QOF’s federal income tax return. Read more about how to file IRS Form 8996 for QOFs.