The gain that will be excluded (not deferred) is the gain on disposition of the interest in the QOF as long as you have held the investment for at least 10 years. You need to invest capital gains on or before 12/31/2026.
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How can I permanently exclude gains investing in an Opportunity Zone?
Is that still an option? What are my options?
Answers
You can still defer gains until 2025 and if you stay invested in the Opportunity Zone for 10 years you have no tax on the profit from the OZ.
You need to set up a QOF and follow all of the parameters.
Still an option until the end of 2026 or thereabouts. It's the interim step-up in basis that is no longer available as of today. So a taxpayer can make an OZ investment and still get both deferral of capital gains and eventual exclusion of appreciation from tax upon sale, but there will be no step-up in basis to eliminate part of the deferred capital gain under present law. There is a potential change in the law on the table in Congress to reinstate the interim basis adjustments, but passage is not imminent.
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