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    Qualified Opportunity Zones 2.0

    A Refreshed Framework for Tax-Advantaged Investments
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    Qualified Opportunity Zones 2.0 (QOZ 2.0) is poised to reshape the next generation of Opportunity Zone investing. Effective January 1, 2027, the permanent program established through The One Big Beautiful Bill Act expands the Opportunity Zone framework with new designated communities and renewed opportunities to pair economic development with tax-efficient investment strategies.
    What Are Qualified Opportunity Zones?

    The Opportunity Zone program was originally created under the 2017 Tax Cuts and Jobs Act to revitalize economically distressed communities using private investments. Qualified Opportunity Zones (QOZs) are census tracts–permanent statistical subdivisions of a county–composed of economically disadvantaged communities. Under QOZ 2.0, new zones will be selected every 10 years, allowing designations to be refreshed over time based on updated economic conditions.

    Key QOZ 2.0 Dates

    • July 1, 2026

      90-day determination period opened for state governors to nominate eligible census tracts to be designated as Opportunity Zones

    • October 28, 2026

      Investor pays deferred tax on original gain

    • December 2026

      IRS and Treasury officially publish new Opportunity Zones

    • January 1, 2027

      Kick-off of new QOZ 2.0 program 

    QOZ Evolution: 1.0 vs. 2.0

    QOZ 2.0 is a permanent evolution of the original Opportunity Zone program or, QOZ 1.0. The updated framework introduces enhanced tax incentives, recurring zone redesignations, and greater transparency with a long-term structure. Understanding the distinctions between the two is essential as the program enters its next chapter.

      QOZ 1.0 QOZ 2.0
    Duration Expires 12/31/2026

    Permanent starting 1/1/2027

    (10-year designation cycles)
    Zone Redesignation Zones in effect until 12/31/2028 New designations beginning 2027 and  every 10 years thereafter
    Income Threshold for QOZ Designation <= 80% area median income

    <= 70% area median income or poverty

    ≥20% and median income <125% of area median
    Gain Deferral Period Gain deferred until 12/31/2026

    5-year rolling deferral from investment date

    (one time relevant to each investment)
    Basis Step-Up

    10% after 5 years

    15% after 7 years

    10% after 5 years

    (one time relevant to each investment)
    Exclusion Cap Permanent after 10 years

    Permanent after 10 years

    (subject to 30-year cap framework)
    Focus on Rural Areas N/A

    30% basis step-up after 5 years / relaxed improvement requirement (~50% of adjusted basis)
    Reporting Requirements Modest Expanded fund reporting and penalties for non-compliance
    How Do Qualified Opportunity Funds Work?

    A Qualified Opportunity Fund (QOF) is an investment vehicle typically organized as a corporation or a partnership for U.S. federal income tax purposes which must hold at least 90 percent of its assets in QOZ businesses and assets. From the date of sale of an appreciated asset that triggers taxable capital gain, an investor generally has 180 days to invest those gains in a QOF (exceptions exist for gain from passthrough entities) in order to reap the significant potential tax advantages of the Opportunity Zone Program.

    QOZ 2.0 Tax Benefits by the Numbers
    00-ICON-01 resized 1
    5-Year Gain Deferral

    Deferral of eligible gains for a period of five years, beginning on the date that the taxpayer makes an investment in a QOF.

    00-ICON-02 resized
    10% Step-Up Basis

    Investors who hold a qualifying QOF investment for five years may receive a 10 percent basis increase on the originally deferred gain. This basis increase is 30 percent for gains invested in rural Opportunity Zones.

    00-ICON-03 resized
    100% Tax Elimination on Appreciation

    Elimination of tax on gains accrued in the QOF after achieving a 10-year holding period.

    Qualified Opportunity Zones

    A Refreshed Framework for Tax-Advantaged Investments

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    Education & Resources

    View All Resources
    QOZs
    Webinar Replay: QOZ 2.0: What We Know, What We're Watching, and What's Next
    Hear from Inland Leadership and Baker McKenzie on the next generation of Qualified Opportunity Zones.
    Watch Now
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    Commercial Real Estate
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    Source https://opportunityzones.com/faq/what-is-opportunity-zones-2-0/

    https://www.hud.gov/opportunity-zones/investors 

    Investments in offerings sponsored by Inland Private Capital Corporation (IPC) involve certain risks including but not limited to tax risks, general real estate risks, risks relating to the financing on the applicable property, if any, risks relating to the ownership and management of the property, risks relating to private offerings and the lack of liquidity, and risks relating to the QOZ and QOF structure. In addition, IPC can give no assurance that it will be able to pay or maintain distributions, or that distributions will increase over time.

    QOZ-Specific Risks to Consider

    There are substantial risks associated with the U.S. federal income tax aspects of a purchasing interests in a qualified opportunity fund. The following risk factors summarize some of the tax risks to an investor. All prospective investors are strongly encouraged to consult with and rely on their own tax advisors. The tax discussion here is not intended, and should not be construed, as tax advice to any potential investor.

    • There is a lack of precedent and limited guidance related to qualified opportunity funds.

    • A program intended to qualify as a qualified opportunity fund may not constitute a qualified opportunity fund for a variety of reasons, including a failure to substantially improve the property within the first 30 months of its operation. If a fund does not qualify as a qualified opportunity fund, then no deferral or elimination of taxable gain will be available to its members.

    • Investors who acquire interests in a qualified opportunity fund and defer gain through such investment will automatically recognize some or all of the federal income tax gain that they deferred on the date that is five years after their investment in such qualified opportunity fund.

    • The state, local and other tax implications of a qualified opportunity zone investment are unclear.

    • This communication includes a brief and general description of certain QOZ and QOF guidelines. Prospective investors should consult their own tax advisor regarding in investment in an IPC-sponsored program.

    The Inland name and logo are registered trademarks being used under license. Inland refers to some or all of the entities that are part of The Inland Real Estate Group of Companies, Inc., one of the nation’s largest commercial real estate and finance groups, which is comprised of independent legal entities, some of which may be affiliates, share some common ownership or have been sponsored and managed by such entities or subsidiaries thereof. Inland has been creating, developing and supporting real estate-related companies for more than 55 years. This material has been distributed by Inland Securities Corporation, member FINRA/SIPC, dealer manager and placement agent for programs sponsored by Inland Real Estate Investment Corporation and its affiliates.