Opportunity Zones
Find Opportunity Funds for your Capital Gains
Your Opportunity Zone Headquarters
Asset Strategy is your Opportunity Zones Headquarters. We help real estate investors and income property owners reinvest capital gains into Qualified Opportunity Funds, deferring taxes today while pursuing long-term, tax-advantaged growth.
With over 35 years of experience, our team has guided investors through the strategies that preserve wealth and keep capital working. Opportunity Zones are now a permanent part of the federal tax code, with a new round of zone designations taking effect in 2027, making this one of the most durable tax-advantaged tools available to investors today.
When you are ready to act, we help you navigate the 180-day reinvestment window and structure your investment correctly from the start, drawing on our network of experienced tax and legal professionals.
2026
Investing in the Zone
Opportunity Zones
A Simple Way to Understand
Opportunity Zones
- An Opportunity Zone is a neighborhood the government picked that needs new investment to grow
- Think of it like helping fix up an old part of town, and getting a tax break as a thank-you
- You take money you made from selling something (like stocks or a property) and put it into a special fund
- That fund invests in real estate or businesses inside one of these zones
- If you keep your money invested for at least 10 years, you may owe no taxes on what it earns (results are not guaranteed)
What are Opportunity Zones?
An Opportunity Zone is an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Opportunity Zones are designed to spur economic development and job creation in these communities by providing tax benefits to investors.
Opportunity Zones are a new community development program established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. The Opportunity Zones program provides a tax incentive for investors to re-invest their realized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones designated by the chief executives of every U.S. state and territory.
The U.S. Treasury, in collaboration with State and Local governments, has certified 8,762 communities in all 50 states, the District of Columbia, five U.S. territories and Puerto Rico as Opportunity Zones.
“Nearly 35 million Americans live in areas designated as Opportunity Zones. These communities present both the need for investment and significant investment opportunities.” – US Treasury
What qualifies as an Opportunity Zone?
To qualify as an Opportunity Zone, a census tract must have a poverty rate of 20% or higher or a median household income that is less than 80% of the surrounding area. The law generally allows for 25% of a state’s low-income community population census tracts to be designated as qualified opportunity zones. Governors are responsible for identifying the areas in their states to be designated as opportunity zones. The same definition of a “low-income community” that is used by the new markets tax credit (NMTC) as the basis for defining an Opportunity Zone.
What are the tax benefits of investing in Opportunity Funds?
A Qualified Opportunity Fund (QOF) is an investment vehicle that specializes in aggregating private investments and deploying that capital in an Opportunity Zone (O-Zone). To take advantage of the tax benefits of investing in Opportunity Zones, investors must reinvest their capital gains from a prior investment into a Qualified Opportunity Fund (QOF), within 180 days of the recognized sale of that prior investment.
Under Section 1400Z of the Tax Cuts and Jobs Act of 2017, investors who elect to reinvest capital gains into Opportunity Funds will receive multiple capital gains tax benefits that will allow an investor to defer, reduce, and ultimately eliminate future capital gains.
1. Deferral of Capital Gains Taxes:
- Capital gains (short-term or long-term) from the sale of any asset that is reinvested in Opportunity Funds within 180 days following the disposition of that asset, shall be excluded from the investor’s gross income until the earlier of: December 31, 2026, or the date the investor sells his investment.
2. Elimination of Capital Gains Taxes for Investments in Opportunity Funds:
- Opportunity Fund investors are exempt from federal taxation on capital gains derived from the appreciation of their investment if the investment is held for at least 10 years.
Other Frequently Asked Questions About Opportunity Zones
How were Opportunity Zones created?
Opportunity Zones were added to the Internal Revenue Code by the Tax Cuts and Jobs Act (TCJA), enacted on December 22, 2017.
Have Opportunity Zones been around a long time?
No. The first Opportunity Zones were designated in April 2018. Zones now cover portions of all 50 states, the District of Columbia, and five U.S. territories.
What is the purpose of Opportunity Zones?
Opportunity Zones are intended to encourage long-term private investment in designated low-income communities to promote economic development and job creation.
How do Opportunity Zones provide tax benefits?
Investors may defer recognition of eligible capital gains invested in a Qualified Opportunity Fund (QOF) until the earlier of:
- The date the QOF investment is sold or exchanged, or
- December 31, 2026
Deferred gain must be recognized in tax year 2026 if still held at that time.
If the QOF investment is held for at least 10 years, post-investment appreciation may be excluded from federal capital gains tax upon sale through a basis step-up election.
(Note: The 5-year and 7-year basis step-ups are no longer available for new investments.)
What is a Qualified Opportunity Fund? (QOF)
A Qualified Opportunity Fund is an investment vehicle organized as a partnership or corporation for the purpose of investing in qualified Opportunity Zone property.
When do Opportunity Zones Expire?
Opportunity Zone designations remain in effect through December 31, 2028.
Investors may continue to hold qualifying investments and remain eligible to elect the 10-year appreciation exclusion through December 31, 2047, subject to current law.
How is “Substantial Improvement” defined?
To substantially improve property, a QOF (or its subsidiary) must, during a 30-month period, make additions to the adjusted basis of the building (excluding land) that exceed the building’s basis at the beginning of that period.
Land does not need to be substantially improved.
How are rollover capital gains of partnerships treated?
A partnership may elect to defer eligible capital gain at the entity level.
If the partnership does not elect deferral, a partner may elect to defer their distributive share.
The partner’s 180-day investment period generally begins on the last day of the partnership’s taxable year, unless the partner elects to use an alternative start date permitted under Treasury regulations.
What is the Qualified Opportunity Zone Program (“QOZ Program”)?
The QOZ Program encourages long-term investment in designated low-income communities by providing tax incentives for eligible capital gains invested through Qualified Opportunity Funds.
What is a Qualified Opportunity Zone (“QOZ”)?
A QOZ is a designated census tract selected by a state governor and certified by the U.S. Department of Treasury.
Governors were permitted to nominate up to 25% of eligible low-income communities within their state.
What qualifies as a Low-Income Community (LIC)?
A census tract generally qualifies if:
- The poverty rate is at least 20%, or
- The median family income does not exceed 80% of the applicable area median income (subject to specific metropolitan and non-metropolitan rules).
Where are QOZs located and how many are there?
There are approximately 8,700 designated Opportunity Zones across all 50 states, the District of Columbia, and several U.S. territories. Zones include rural, suburban, and urban areas.
What is a Qualified Opportunity Zone Business? (“QOZB”)?
A QOZB must meet several requirements, including:
- At least 70% of tangible property must be Qualified Opportunity Zone business property.
- At least 50% of gross income must be derived from the active conduct of business within a QOZ.
- No more than 5% of assets may consist of nonqualified financial property.
- The business generally may not be a “sin business” (e.g., gambling facilities, liquor stores, etc.).
What proceeds are eligible for QOZ tax benefits?
Eligible capital gains must arise from the sale or exchange of property with an unrelated party (generally no more than 20% common ownership) and must be treated as capital gain for federal income tax purposes.
The gain must be invested into a QOF within 180 days of recognition.
Eligible gains may arise from many types of assets, including:
- Stocks and securities
- Real estate (investment or business property)
- Business interests
- Tangible and intangible investment property
What is an eligible taxpayer?
Eligible taxpayers include:
- Individuals
- C corporations (including RICs and REITs)
- Partnerships
- Certain other pass-through entities
The 180-day reinvestment period generally begins on the date the gain would otherwise be recognized for federal income tax purposes.
Do QOZ tax benefits apply to states as well?
Federal tax incentives apply nationwide. However, states are not required to conform to federal QOZ treatment. State tax treatment varies by jurisdiction.
What are the most important deadlines and/or timelines for QOF investment?
180 Days:
Eligible capital gains must be invested within 180 days of recognition.
December 31, 2026:
End of the deferral period. Deferred gain must be recognized in tax year 2026.
10 Years:
A QOF investment must be held for at least 10 years to qualify for exclusion of post-investment appreciation.
December 31, 2047:
Last date currently permitted to elect the 10-year basis step-up (subject to future legislation).
Can an investor trade interest in one QOF for another?
No. Selling or exchanging an interest in a QOF generally triggers recognition of deferred gain. The 180-day rule applies only to the initial investment of eligible capital gains.
Are gains from life insurance and annuities eligible for QOZ tax treatment?
No. Only gains treated as capital gains for federal income tax purposes are eligible. Gains taxed as ordinary income do not qualify.
Can an investor invest “non-qualified” proceeds into a QOF?
Yes. Any funds may be invested in a QOF. However, only eligible capital gains qualify for the Opportunity Zone tax benefits.
DST 1031 properties are only available to accredited investors (typically defined as having a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years; or have an active Series 7, Series 82, or Series 65. Individuals holding a Series 66 do not fall under this definition) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney.
IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax concepts, therefore you should consult your legal or tax professional regarding the specifics of your particular situation.
There are material risks associated with investing in real estate securities including illiquidity, general market conditions, interest rate risks, financing risks, potential adverse tax consequences, general economic risks, development risks, and potential loss of the entire investment principal.
Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor.
Advisory services offered through Asset Strategy Advisors, LLC (ASA). Securities offered through representatives licensed with either Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Insurance offered through Asset Strategy Financial Group, Inc. (ASFG). ASFG and ASA are independent of CIS.
Asset Strategy does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstances.
There is no guarantee investment plans will meet its objectives.
This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every advisor listed. For additional information, please contact Asset Strategy at info@assetstrategy.com.
