Opportunity Zone Tax Deferral 2027 Calculator
Qualified Opportunity Zone (QOZ) Funds let you defer capital gains tax by reinvesting within 180 days. Hold 10+ years = appreciation tax-free. Calculate tax savings.
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Qualified Opportunity Zone (QOZ) Funds were created by 2017 TCJA — and the OBBB 2025 extended/expanded the program. Three benefits: (1) Defer capital gain tax until 2026 or fund disposition (whichever earlier — recent extensions push to 2030 for new investments). (2) Hold 5 years = 10% basis step-up; 7 years = additional 5%. (3) Hold 10+ years = appreciation of QOZ investment is TAX-FREE.
How QOZ Works Mechanically
You have a capital gain (any kind — stock, real estate, business). Within 180 days, invest gain amount into a Qualified Opportunity Fund (QOF). QOF invests in QOZ property/business. Original gain deferred until 2026 or earlier disposition. Appreciation on QOF investment, if held 10+ years, is fully tax-free.
OBBB 2025 Extensions
OBBB (P.L. 119-21, signed July 4, 2025) extended the QOZ program with new designations through 2030. Newly designated 2026-2030 zones get fresh 7-year basis step-ups. Existing 2018-2025 investments keep their original timeline. Key for tax planning: time new gains to coincide with extended QOZ availability.
Risk vs Reward
QOFs invest in economically distressed census tracts. Real estate projects in QOZs often higher risk (development, vacant land, gentrification bets). Returns vary widely — top 10% funds beat S&P; bottom funds lose money. Diversify across 2-3 funds.
Accredited Investor Requirement
Most QOFs are 506(b) or 506(c) Reg D — accredited investors only ($200K single / $300K married income, OR $1M net worth excluding home). Some QOZ REITs are public — accessible to retail investors but smaller tax benefit due to REIT mechanics.
Last updated May 2026. Sources: IRS Opportunity Zone Investments, CDFI Fund Designations.