Invest a gain in an Opportunity Zone fund
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If you sell something at a gain, investing that gain in a Qualified Opportunity Fund within 180 days defers the tax on it. Hold the fund for ten years, and its growth comes out tax-free.
The 2025 tax law made the program permanent. For investments starting in 2027, the gain is deferred for five years and 10% of it is forgiven, or 30% in rural zones, with new zones named every ten years.
How it works
Put a capital gain into a Qualified Opportunity Fund within 180 days and the tax on it is put off. Hold the fund ten years and its growth comes out tax-free. The 2025 tax law made the program permanent: from 2027 the gain is deferred five years and 10% of it is forgiven (30% in rural zones), with new zones named every ten years.
What makes it hold up
- The gain and its date
- The investment into the fund within 180 days
- Form 8997 filed each year
Risks
Moderate. The ten-year hold is the main benefit, so money is tied up. Investments made before 2027 fall under the old rules, where the deferral ends at the end of 2026.
Questions to ask your CPA
- Is waiting for the new rules better than investing this year?
- Does my gain qualify, and when does my 180 days start?
Common questions
What gains qualify?
Capital gains, such as from selling stock, a business or real estate. You invest the gain itself, not the whole sale price.
When does the 180 days start?
Usually on the day of the sale. Gains passed through from a partnership or S corp can have different start dates, so confirm with your CPA.
Should I invest now or wait for the new rules?
Investments made before 2027 fall under the old rules, where deferral ends at the end of 2026. For many, waiting for the 2027 rules is better, but it depends on the gain and the fund.
What is the catch?
The best benefit requires a ten-year hold, so your money is tied up, and the fund's investments still have to perform. Vet the fund like any private investment.
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Education, not advice. Tax law changes and every situation is different, so confirm the details with your CPA or tax advisor before acting. This page was last checked against tax law as of October 2026, including the 2025 tax law, in October 2026.