Opportunity Zone Deferral Calculator
Compare Opportunity Zone capital gain deferral + 10-year step-up vs paying gain immediately and investing in regular taxable account.
| Original gain | — |
| LTCG rate | — |
| OZ FMV at year 10 | — |
| Original gain tax (paid 2026) | — |
| OZ net wealth | — |
| Pay-now alternative net | — |
Opportunity Zone (OZ) program defers capital gain tax until 2026 and eliminates tax on OZ investment appreciation after 10 years. Requires investment in qualified opportunity zone fund (QOF) within 180 days of gain realization.
How OZ Tax Benefits Work
Three benefits: (1) Defer original capital gain tax until 2026 or sale, whichever first. (2) Reduce deferred gain by 10% if QOF held 5+ years (now expired benefit). (3) Permanent exclusion of tax on QOF appreciation if held 10+ years.
180-Day Reinvestment Window
Must invest gain (or partial gain) into a QOF within 180 days of realizing the capital gain. Late investment forfeits all OZ benefits. Use a Qualified Intermediary or self-certify QOF status.
10-Year Hold Required
Step-up basis to FMV at sale only kicks in after 10 years. Early sale loses appreciation exemption. Many OZ funds structured 10-15 year holds. Plan illiquidity.
Risk Considerations
OZ funds often concentrate in geographically risky areas. Underwriting weaker than mainstream RE. 10-year illiquidity. 2026 deferral end means tax bill comes due. Run risk-adjusted comparison, not just tax-adjusted.
Last updated May 2026. Sources: IRC §1400Z, IRS OZ FAQs.