Opportunity Zones 2.0 — Investor FAQ

Opportunity Zone designations now run on a permanent, rolling ten-year cycle. Each decade, local jurisdictions recommend census tracts to the state; GO-Biz and the Department of Finance evaluate those recommendations, publish a draft recommendation list, and take public comment; the Governor’s office then finalizes California’s nominations and submits them to the U.S. Treasury; and Treasury certifies the final designations. A tract on the state’s list is a nomination until Treasury certifies it.

For this cycle: local recommendations were due July 20, 2026; the draft list was published August 3, 2026; the public comment window ran August 3 to 28, 2026; the Governor then nominated the state’s final 620 tracts, and the U.S. Treasury has certified them; and designations take effect for investments made on or after January 1, 2027 — and remain in place for ten years.

California’s OZ 2.0 designation process is complete. After the August public comment period, the state finalized a list of 620 census tracts — home to an estimated 2.6 million people in 55 counties — and the U.S. Treasury has certified the Governor’s nomination. The new zones take effect January 1, 2027, and remain in place for ten years.

Next milestone: January 1, 2027 — the OZ 2.0 map takes effect for new investments.

The final list differs from the August draft: the state’s initial recommended list had 560 tracts, and the final 620 reflect public comments and local recommendations. The downtown Oakland tracts we follow appear on California’s final list — supported by nomination submissions the City of Oakland compiled with Behring’s help, drawing on the same capacity, transit, and capital-stack economics that underpin our program.

No — the comment window closed August 28, 2026. On August 3, 2026, the California Department of Finance, with GO-Biz, published the state’s draft list of census tracts recommended for Opportunity Zone 2.0 nomination — 560 tracts, selected by scoring all 2,479 eligible tracts and evaluating 1,232 local recommendations — and opened a public comment period running through August 28, 2026, at 11:59 pm. Anyone could submit comments through the state’s August 2026 comment portal, one census tract per comment; a separate August 3–14 window let eligible local entities propose “off-list” tracts with supporting data.

The state received 3,754 comments on 863 individual tracts. With the window closed, it weighed those comments together with its demographic and socioeconomic evaluations, the Governor’s office finalized California’s nominations, and the U.S. Treasury certified them.

No — the draft recommendation list was an interim, unofficial step: it reflected the state’s own screen of socioeconomic data and local recommendations, but it was not the final map. After the comment period, the Governor’s office finalized California’s nominations, which could add, remove, or swap tracts relative to the draft, and submitted them to the U.S. Treasury.

We now know. Treasury has certified California’s final list of 620 tracts, and the Department of Finance has published the list and an interactive map of the OZ 2.0 designated tracts. The designations take effect January 1, 2027.

An Opportunity Zone is an economically distressed community — defined at the individual census-tract level — that is nominated by a state’s governor and certified by the U.S. Treasury through the IRS. Under certain conditions, new investments made in these zones may qualify for preferential federal tax treatment. The goal is to channel private capital into underserved communities.

“OZ 2.0” refers to the permanent renewal and enhancement of the program enacted through the One Big Beautiful Bill Act (Public Law 119-21), signed into law July 4, 2025. The original program was set to expire December 31, 2026. Section 70421 of the statute makes Opportunity Zones a permanent feature of the Internal Revenue Code while updating the eligibility criteria, the tax incentives, and the compliance and reporting requirements.

The headline differences:

Most major changes — the new tax-benefit structure and the redesignated zones — apply to investments made on or after January 1, 2027.

They are unaffected. Investments made under the original TCJA rules continue to be governed by the prior rules; OZ 2.0 does not retroactively change their treatment. The two maps overlap for a transition period:

• Jan 1, 2027 — the OZ 2.0 map and investment rules take effect.
• Jan 1, 2027 – Dec 31, 2028 — both the OZ 1.0 and OZ 2.0 maps remain valid.
• Dec 31, 2028 — the OZ 1.0 tracts sunset; only OZ 2.0 zones remain.

No. You can claim the tax benefits even if you do not live, work, or own a business in an Opportunity Zone. What matters is that you invest eligible capital gains into a Qualified Opportunity Fund and meet the holding-period rules.

A QOF is an investment vehicle — organized as a corporation or partnership — set up to invest in qualified Opportunity Zone property. A fund self-certifies as a QOF by filing IRS Form 8996 with its federal return; no separate IRS approval is required. Most real-estate QOFs use a two-tier structure: the QOF invests into a Qualified Opportunity Zone Business (QOZB) that owns and operates the project.

Since the first designations in 2018, more than $100 billion of qualifying capital has flowed into over 5,300 low-income census tracts nationwide. The incentive is uncapped, investor-driven, and “by-right” — any taxpayer with a capital gain can invest in a designated tract and claim the benefits without applying for a federal award. Real estate is the predominant use, but more than one-third of investment has gone into other sectors, according to IRS data.

Any individual or corporation with recently realized capital gains may be eligible. The qualifying capital must go in as an equity investment (not debt, though debt can be part of the larger financing). Eligible gains generally include capital gains from selling stock, a business, real estate, or other appreciated assets such as crypto — short- or long-term. Your specific gain should be confirmed with your tax advisor.

To defer a gain, you must reinvest it into a QOF within 180 days of realizing it. The clock generally starts on the date of the sale or exchange that produced the gain (special rules apply to gains passed through from partnerships and other entities). Miss the window and the gain is no longer eligible for OZ deferral.

When you roll an eligible gain into a QOF, you defer paying tax on it. Under OZ 2.0, the deferred gain is recognized on the fifth anniversary of your investment (or earlier, if an “inclusion event” such as a sale happens first). This rolling five-year clock replaces OZ 1.0’s single fixed deferral date, and applies to gains invested after December 31, 2026.

If you hold the QOF investment for at least five years, 10% of your originally deferred gain is permanently excluded from tax (through an increase in your tax basis).

This is the centerpiece. If you hold the QOF investment for at least ten years, you can elect to step your basis up to fair market value when you exit — so the post-investment appreciation is excluded from federal tax, and depreciation recapture on the project is avoided.

New under OZ 2.0 If the investment is held longer than 30 years, appreciation above the investment’s fair market value at the 30-year anniversary becomes taxable — the value is effectively “frozen” for exclusion purposes at year 30.

The full OZ 2.0 benefit structure — the rolling five-year deferral and the associated step-ups — applies to eligible gains invested after December 31, 2026. Gains realized in late 2026 can be positioned to be reinvested within their 180-day window into a 2027 deployment, capturing the enhanced permanent benefits. This is why OZ 2.0 programs are oriented to post-2026 capital.

Often, yes. OZ benefits can stack with other tools — for example, the OBBBA also restored 100% bonus depreciation, which can pair with an OZ investment, and OZ projects frequently combine with state and local programs (and, at the project level, tax-increment districts such as an EIFD). Stacking rules are fact-specific and interact with the inclusion-event and basis rules, so combinations should be structured with your tax advisor.

The program now runs on a permanent, rolling 10-year cycle — governors must nominate zones every decade. The first round of nominations was made in the window that opened July 1, 2026, and the new designations take effect for investments made on or after January 1, 2027. A governor may nominate up to 25% of the state’s eligible census tracts. California had 2,479 eligible tracts, and Treasury certified the Governor’s nomination of 620.

OZ 2.0 tightened the income test. A tract qualifies if it meets one of:

• Median family income (MFI) does not exceed 70% of the applicable median; OR
• Poverty rate is at least 20% and MFI does not exceed 125% of the applicable median.

Treasury set each tract’s MFI using the 2020–2024 American Community Survey 5-year estimates. The OZ 1.0 “contiguous tract” exception (letting a non-qualifying adjacent tract be included) has been eliminated — only independently qualifying tracts may be designated.

Treasury released the official list of eligible census tracts on April 6, 2026. You can check the official list on the Treasury Qualified Opportunity Zones page, or use interactive mapping tools from organizations such as Novogradac and the Economic Innovation Group. For California, the final list of 620 OZ 2.0 designated tracts is available as a download and an interactive map on the Department of Finance’s Opportunity Zones page.

Only if it independently meets the new, stricter criteria and appears on Treasury’s official OZ 2.0 eligible-tract list. Existing OZ 1.0 tracts are not automatically eligible or ineligible — each is tested fresh, and some OZ 1.0 tracts will not qualify under the 2.0 standards.

The Department of Finance scored all 2,479 eligible tracts on poverty, median family income, renter cost burden, crowding, and unemployment, using 2020–2024 American Community Survey 5-year estimates. GO-Biz evaluated the 1,232 tract recommendations submitted by local jurisdictions for developmental readiness and local economic impact. Together, these produced the 560-tract draft list published on August 3, 2026. The Governor’s office made the final call: the final list of 620 tracts balances the Finance score, local recommendations, and public comments, along with state priorities such as geographic equity.

• June 15 – July 20, 2026 — local jurisdictions submitted the Local Authority Recommendation Form (deadline was moved up from July 25 to July 20 to make room for the comment period). Complete.
• August 3, 2026 — the State published the draft recommendation list. Complete.
• August 3 – 28, 2026 — public comment window, via the DOF August 2026 comment portal. Closed.
• August 3 – 14, 2026 — separate window for eligible local entities to propose “off-list” tracts with supporting data. Closed.
• Fall 2026 — the U.S. Treasury certified the Governor’s nomination of 620 tracts. Complete.
• January 1, 2027 — designations take effect for new investments.

A wide range. Eligible uses include new real-estate development, rehabilitation of vacant properties, housing, mixed-use projects, infrastructure, manufacturing and industrial facilities, energy projects, local operating businesses (existing and startup), and even qualified business equipment. Commercial and industrial uses — including data-center and high-tech infrastructure — are eligible. A short list of “sin businesses” (e.g., liquor stores, gambling, tanning) is excluded.

For real estate to qualify, the investment must be original use (new to the zone) or the property must be substantially improved — generally meaning improvements that exceed the property’s acquisition basis within a 30-month window.

Most real-estate funds are built in two tiers: investors put capital into the QOF, which in turn invests into a Qualified Opportunity Zone Business (QOZB) that holds and operates the project. The QOZB tier unlocks more flexible compliance tests — including the working-capital safe harbor — and is the standard structure for a development deal.

A QOF must hold at least 90% of its assets in qualified Opportunity Zone property, measured on a semi-annual basis (averaged across two testing dates per year). Falling short can trigger penalties unless reasonable-cause relief applies.

A QOZB can hold cash earmarked for a project for up to 31 months (and longer in some stacked or government-delay situations) without failing its asset tests — provided there is a written plan and schedule for deploying the capital. This is what lets a development deal raise and hold capital while it builds.

A fund self-certifies by filing IRS Form 8996 annually with its federal return — both to elect QOF status and to report its ongoing compliance with the 90% asset test. Investors making the deferral election file Form 8949 (and related forms) with their own returns.

OZ 2.0 imposes expanded annual reporting, including the type of property held, number of residential units, asset values, employment/jobs, and the specific census tracts of investment. The statute also adds penalties for reporting failures. These are designed to improve transparency on the program’s economic impact.

An inclusion event is a transaction that ends or reduces your qualifying investment early — for example, certain sales, transfers, or distributions before the 10-year mark — and can accelerate recognition of your deferred gain. Because pre-10-year distributions and transfers can trigger tax, distribution policy in an OZ fund has to be designed carefully.

Behring is a vertically-integrated California real-estate developer and a federally-designated EB-5 regional center. The program sponsors a Qualified Opportunity Fund built around an identified anchor development in an OZ 2.0 tract — with Behring acting as both fund sponsor and developer/operator of the underlying project.

Many OZ funds raise capital before identifying a deal, which creates blind-pool and 90%-asset-test timing risk. Anchoring the fund to a specific, controlled development is intended to reduce that uncertainty — investors can see the project their capital backs.

The program is designed for U.S. taxpayers with eligible capital gains — from a business sale, real estate, stock, or crypto — and is expected to be offered to accredited investors under Regulation D, Rule 506(c), which requires verification of accredited status. It is built to be accessed through CPA, RIA, and wealth-advisor channels.

You can submit a non-binding indication of interest to be kept informed and to reserve a place as the anchor investment is finalized. Submitting interest creates no obligation and is not a commitment of capital.

Express interest — keep me informed