A census tract designated to attract long-term investment; by investing eligible capital gains into a Qualified Opportunity Fund (QOF) that invests in OZ property, you can receive special federal tax treatment.

A QOF is a partnership or corporation that self-certifies to invest at least 90% of its assets in OZ property; it reports annually via IRS Form 8996.

The official list of designated Opportunity Zones is maintained by the U.S. Treasury's CDFI Fund, and is available as a spreadsheet and via mapping tools.

There are approximately 8,764 designated OZ census tracts across the U.S. (plus some territories) as listed by the CDFI Fund.

You can (1) defer eligible capital gains invested into the QOF, (2) receive basis step-up benefits depending on timing, and (3) exclude post-investment appreciation if you hold the investment for at least 10 years and make the required election.

Generally, capital gains may qualify; you only need to invest the gain amount (not necessarily all proceeds) to receive OZ tax benefits.

If you hold any QOF investment during the tax year, you must file IRS Form 8997 to report the deferral and track your position; failure to file may lead to a presumption of inclusion.

You must hold the QOF investment for a minimum of 10 years to elect the exclusion of post-investment appreciation, per the final regulations.

Upon recognizing eligible gain, you generally have 180 days to invest it into a QOF; for partners or S-corp shareholders, the start date may differ under special rules.

A QOF must ensure that on average at least 90% of its assets are qualifying OZ property, tested semi-annually (last day of first 6-month period and end of tax year).

A QOZB must meet tests such as: at least 70% of its tangible property is in an OZ, and at least 50% of its gross income is from the active conduct of a trade/business within the zone; certain excluded business types apply.

If property does not begin original use in the zone, then to qualify the improvements within a 30-month period must exceed the adjusted basis of the property (land excluded from calculation).

A QOZB may hold working capital for up to 31 months if it adopts a written plan and schedule to acquire or improve OZ property; this safe harbor helps developers plan construction or redevelopment projects.

You can reference the CDFI Fund's tract list or use mapping tools (third-party or embedded) to drop an address and verify OZ status.

Not always. Some states conform fully, some partially, others not at all. Always check your state Department of Revenue for OZ-specific guidance.

Yes — the Treasury/IRS have issued final regulations and guidance; more recently, policy emphasis on rural zones and additional incentives have emerged. Investors and sponsors track these for timing, structuring and potential benefit updates.

Form a partnership or corporation, adopt a qualifying purpose to invest in OZ property (not another QOF), track the 90% asset test, and file Form 8996 for at least the first year of operation.

They need to structure a stack (QOF → QOZB), prepare a written working-capital plan (for 31-month safe harbor), ensure property qualifies (original use or substantial improvement), meet asset/income tests, and maintain documentation.

Yes. Businesses other than real estate may qualify as long as they meet the QOZB tests (property, income, use) and are not one of the excluded categories.

Events such as certain dispositions, non-compliance with key tests, or failure to make elections may trigger taxable inclusion of the previously deferred gain under the OZ statute/regulations.

Common mistakes include: missing the 180-day investment deadline (or mis-determining its start), failing the 90% asset test due to too much idle cash, weak documentation for the 31-month working-capital plan, assuming state tax rules mirror federal rules, and failing to file required forms (8996, 8997).

Use sources such as the IRS Opportunity Zones hub and FAQs, the Federal Register final regulations, the U.S. Code §1400Z-2 for statutory language, and the CDFI Fund tract list and updates.

No. This site is for educational purposes only. Always consult a qualified tax, legal or investment professional for your specific situation.