Opportunity Zones Explained for CPAs

CPAs are uniquely positioned to help their clients unlock powerful tax advantages through Opportunity Zone (OZ) investing. When clients realize capital gains – whether from the sale of a business, real estate, stock, or crypto – CPAs can guide them to consider reinvesting those gains into a Qualified Opportunity Fund (QOF) within 180 days. This strategy can defer taxes on the original gain until 2026 (under the current OZ program) and potentially eliminate taxes on any appreciation from the OZ investment if held for 10 years.

By identifying eligible gains and aligning them with the right investment windows, CPAs not only help clients reduce their tax burden but also add proactive, strategic value beyond traditional compliance work.

About the Opportunity Zone Program

Qualified Opportunity Zones (OZ) were created as part of the Tax Cuts and Jobs Act of 2017. These zones were designed to spur economic development and job creation in communities throughout the country by providing tax benefits to investors with eligible capital gains. The OZ program incentivizes long-term investment to revitalize underserved, often underdeveloped communities across the U.S.

Investors have 180 days from the day the capital gains event occurs to invest into a Qualified Opportunity Zone Fund.

OZ Tax Benefits*

1. Defer Original Capital Gains Tax
Upon investment into a QOF, the tax liabilities of eligible capital gains can be deferred until the investor’s 2026 tax return, payable April 15, 2027. Importantly, investors are not required to invest the entire capital gain, they can invest all or only a portion.

2. Eliminate Taxes on OZ Investment Gains
If the investor holds the QOF investment for at least 10 years, they can exclude capital gains tax liabilities on any new gains realized from that investment.

3. No Depreciation Recapture
With OZ investments, depreciation can be used to offset ordinary income tax liabilities like traditional real estate investments. However, OZ investments are not subject to recapture tax at the terminal sale.

*These tax benefits are associated with the current OZ program (OZ 1.0), effective through 12/31/2026. 

The current Opportunity Zone (OZ) program, often referred to as OZ 1.0, is set to expire on December 31, 2026. This means investors still have time to take advantage of its benefits if they’ve experienced a capital gains event this year or anticipate one in the coming months.

Looking ahead, the newly enacted “One Big Beautiful Bill” has made the Opportunity Zones program permanent through the launch of OZ 2.0, which will take effect starting January 2027. Investors should consider acting now under the current program while also preparing for the expanded, long-term opportunities ahead.