You can invest non-capital gains into Opportunity Zones; you just don't get the same tax benefits.
Ask A Question
Why can’t I invest non-capital gains into an opportunity zone?
Answers
You can; it's just that you won't get any tax benefits to the extent you invest non-capital gains. The short answer is because that's what the statute says. The longer answer is because Congress wanted to stimulate economic activity on both the sell-side and the buy-side of an OZ transaction. You can debate the merits of the policy all you like, but the law on this question is clear.
The policy objective of the Opportunity Zone program was to provide an incentive for taxpayers to (i) sell off investments with substantial unrealized appreciation (which were "stuck" because of the resulting tax liability) and (ii) invest the resulting proceeds in underserved communities. Both aspects of this policy would not have been satisfied if taxpayers could invest (and defer) ordinary income as well.
You can, many funds allow non cap gain rollover investments but you do not get any of the Opportunity Zone tax benefits.
DISCLAIMER:the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal and financial experts prior to participating in any aspect relating to Opportunity Zones. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.