Opportunity Zones: REMINDER – Prepare to Pay Your Deferred Opportunity Zones Capital Gains Tax

On July 4, 2025, the One Big Beautiful Bill Act made the Opportunity Zones (OZ) tax designation and investment program permanent. One of the initial benefits from the OZ program, implemented as part of the Tax Cuts and Jobs Act of 2017, is about to have its reckoning. Taxpayers be warned, its 2026 and time to prepare to pay the deferred capital gains tax.

OZ Taxpayers that invest realized capital gains in accordance with the regulations of the OZ program prior to December 31, 2025 are permitted to defer payment of their capital gains tax on such capital gains until the 2026 tax year.  As a result, those applicable Taxpayers will not only owe taxes on income generated in the 2026 calendar year, but they will also owe their deferred capital gains tax on their qualified OZ investment as well. The capital gains tax rates are currently 15 and 20% based on taxable income of the Taxpayer.

As experienced transactional Opportunity Zones attorneys, R&E will continue to provide guidance on the additional regulations expected from the Department of Treasury as they prepare for the permanency of the OZ program.

If you have an impending capital gain, property or development project which may be subject to the Opportunity Zones program or would like more information, please contact your trusted R&E Attorney or Adam R. Sanders, who authored this industry update and reminder on Opportunity Zones Deferred Capital Gains Tax.