Opportunity Zone Economic Development Program
The Opportunity Zone Program is designed to encourage economic development and job creation in distressed communities through tax benefits. Investors may defer taxes on most capital gains up to Dec. 31, 2026 by making an eligible investment in an Opportunity Zone.
Under a nomination process completed in June of 2018, 8,761 communities in all 50 states, the District of Columbia, and 5 U.S. territories were designated as qualified Opportunity Zones. Opportunity Zones retain their designation for 10 years.
Almost all capital gains are eligible. Contact 800.829.1040 to verify eligibility.
To qualify for deferral, the amount of a capital gain to be deferred must be invested in a Qualified Opportunity Fund (QOF), which must be an entity treated as a partnership or corporation for Federal tax purposes and organized in any of the 50 states, D.C. or U.S. territories for the purpose of investing in qualified Opportunity Zone property. The QOF must hold at least 90% of its assets in qualified Opportunity Zone property.
Investors can defer tax on any prior capital gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%. If the investor holds the investment in the Opportunity Fund for at least 10 years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
To become a Qualified Opportunity Fund, an eligible corporation or partnership self-certifies by filing IRS Form 8996, Qualified Opportunity Fund, with its federal income tax return. Early-release drafts of the form and instructions are posted, with final versions expected in in the near future.
For additional information, or to begin the process, call or email the program contacts.
The Treasury Department and the Internal Revenue Service will be providing further details, including additional legal guidance, on the Opportunity Zone tax benefit. Information will be posted on the U.S. Department of the Treasury CDFI Fund website and the IRS Tax Reform page.
For complete information about funding programs, including your application status, please contact funders directly. Summaries are provided for your convenience only. RHIhub does not take part in application processes or monitor application status.