Can I Defer Capital Gains by Investing in an Opportunity Zone?

Yes — Qualified Opportunity Zone (QOZ) funds allow you to defer — and potentially reduce — capital gains by reinvesting them within 180 days of the sale into a Qualified Opportunity Fund. You defer the original gain until you sell the QOZ investment or until December 31, 2026, whichever is earlier. If you hold the QOZ investment for at least 10 years, any appreciation inside the fund is completely excluded from tax — meaning only the original deferred gain is taxable, not the new growth. The zones were designated in low-income communities to attract investment, and the tax benefits are designed to compensate for higher development risk. Consult a CPA or financial advisor before investing, as QOZ funds vary significantly in quality and risk.