OZ 2.0: Key Updates, Tax Benefits, & Strategic Insights for Real Estate Investors

The Opportunity Zone (OZ) program has undergone a major evolution with the passage of the One Big Beautiful Bill, making the program permanent with additional tax incentives and strategic advantages for investors with capital gains. 

In our recent webinar featuring Jeff Feinstein, Managing Partner of Pinnacle Partners, Jill Homan, Managing Director of Pinnacle Partners, and Brendan McAuliffe, CPA, Partner at BMMS Partners, PLLC, we took a deep dive into what OZ 2.0 means for investors. 

In case you missed it, you can watch the full recording below and learn more about: 

  • Why OZ 1.0 still remains an effective strategy for investors with a recent or expected liquidity event (41:41)
  • What OZ 2.0 means for investors (4:37)
  • How OZ 2.0 differs from OZ 1.0 (12:40) 
  • Enhanced tax benefits associated with OZ 2.0 (23:50)
  • How the 180-day deadline can be flexible for investors with partnership gains (35:07)



Whether investing in OZ 1.0 or waiting for OZ 2.0 makes the most sense for you depends on the timing of your liquidity event and your long-term investment goals. If you have recently realized eligible capital gains, OZ 1.0 may be your only option. By investing now in OZ 1.0 you can still defer your capital gains tax bill until the end of 2026, while seeking tax-free growth on your OZ investment and use depreciation without recapture. While OZ 2.0 will offer attractive tax advantages, the legislation is not yet finalized, and investors cannot reinvest capital gains into an OZ 2.0 Qualified Opportunity Fund until January 1, 2027.

Have questions about your liquidity event and are you interested in exploring what your options may be? Contact us below to schedule a call.

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Past performance of Pinnacle Partners OZ Funds is not indicative of future results. There can be no assurance that the fund’s objectives will be achieved or that cash distributions will, in fact, be made or, if made, whether those distributions will be made when or in the amount anticipated or that certain tax benefits will be available to investors. An investment in the fund is illiquid, speculative, and will involve significant risks. It is only offered to suitable and qualified investors. Full details about the fund and its associated risks can be found in the fund offering documents. 

Nothing in this blog post should be construed as tax advice.  Please confer with your tax adviser to determine if an investment in an OZ fund is right for you.