Hi,
If you’re expecting a large capital gain in the near future, from selling a business, investment property, stock, or anything else, there’s a new version of the Opportunity Zone program coming that’s more generous than the original, and the businesses that benefit most from it are the ones that start planning before it actually opens.
You don’t need to already be a real estate investor. If any of these apply to you, this is worth a conversation now:
- You’re planning to sell a business, property, or a large block of stock or other appreciated assets in the next year or two
- You’ve already realized a capital gain in 2026 and are deciding what to do with it
- You’re a real estate developer or investor looking at where the next round of designated zones will land
- You run a business that could plausibly relocate or expand into a designated zone
Here’s what’s changing under Opportunity Zones 2.0:
- The program becomes permanent, with new zone designations effective January 1, 2027, and states nominating their tracts by July 1, 2026
- Instead of one fixed round of zones picked back in 2018, designations now run on a rolling 10-year cycle, so the map gets redrawn periodically going forward
- The old program had a hard cliff, every deferred gain became taxable on December 31, 2026, no matter when you invested. Under the new version, each investment gets its own rolling 5-year deferral clock starting from the date it’s made
- The basis step-up after a 5-year hold is 10% as before, but investments through a Qualified Opportunity Rural Fund can get a 30% step-up instead, three times the standard benefit, with a lower bar for how much a rural property needs to be improved
- Qualifying census tracts are getting more selective, capped at 70% of the area’s median family income instead of the old 80% threshold, so the pool of eligible zones is expected to shrink by roughly a quarter
The catch is that none of this is available yet. The old program’s rules apply through the end of 2026, and the new one only opens for investments made on or after January 1, 2027.
That gap is exactly where the planning matters, deciding when to realize a gain, whether to bridge into the new program, and which zones are worth watching once they’re announced, all needs to happen before the calendar flips, not after.
Reply to this email by Friday and we’ll set up a free 15 minute call with our senior tax advisor to see whether this fits into your plans for an upcoming sale or gain, and what to line up before January.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com
