Your Opportunity Zone Investment Doesn't End Dec 31, 2026

Your Opportunity Zone Investment Doesn't End Dec 31, 2026

I’ve taken this call four times in the last few weeks, and I expect I’ll take it a whole bunch more before the year is out.

It goes something like this. A Texan invested capital gains into an opportunity fund a few years back: a project in Houston, or San Antonio, or out in one of the rural tracts. Now they’ve read that opportunity zones “expire at the end of 2026,” and they’re convinced the ground is about to open up underneath them.

Let me settle this.

Human Authored by

Daniel Goodwin

Your existing Opportunity Zone investment is fine.

The tracts designated back in 2018 remain designated through December 31, 2028. Your ten-year clock keeps running. If you’ve been holding since 2019 or 2020, the exclusion you’ve been waiting on is still there waiting for you. The IRS has even confirmed that funds may continue to treat those tracts as qualified zones for compliance testing purposes all the way out to 2047, long after the designation itself lapses.

“The old program is ending the way programs end: quietly, on a technicality most people will read about too late.”

Nobody is coming to take your investment away.

Now let me tell you the part almost nobody is getting right.

“Opportunity Zones live until 2028” is true.
It is also a trap.

Here’s the mistake I’m watching people make: they hear that the old zones remain in effect until the end of 2028, and they conclude they have two more years to put new money into those old deals.

They do not.

The new law requires that property be acquired after what it calls an “applicable start date” — the January 1 following a tract’s designation. The zones designated in 2018 don’t have one, because they were designated years before this law existed. The IRS spelled out the consequence in Notice 2026-40: property acquired in one of those old zones after December 31, 2026 generally cannot qualify, even though the tract is still technically on the map.

There are narrow exceptions. A project with a written working-capital plan, adopted and partially funded before year-end, can continue to take on capital. So can ordinary replacement and modernization of property a business already owns. Neither of those is a door you can walk through casually in December.

For practical purposes, new money into old zones closes on New Year’s Eve.

Your deferred gain still comes due in December.

This is the part that stings, and I’d rather you hear it from me now than from your tax return in April.

If you deferred a gain under the original rules, that gain becomes taxable on December 31, 2026. It cannot be re-deferred into a new fund. The election you made years ago stays made.

That means a tax bill could possibly arrive without a single dollar of cash coming out of the fund to pay it. I have seen this catch people flat-footed, and it is entirely avoidable. Run the numbers with your tax advisor before Thanksgiving, not after New Year’s. Know the federal number, know your estimated payments, and know where the cash is coming from.

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What Texans should actually be doing this fall

Governor Greg Abbott’s office submitted the state’s opportunity zone nominations to Treasury on August 3. Treasury certifies them from there, and the new Texas map takes effect on January 1, 2027, running for a full ten years through 2036.

So if you’re sitting on a gain right now, the question isn’t, “How do I beat the December deadline?” The question is whether your capital belongs on the new map at all… and, if it does, whether your 180-day window can be adjusted to land on the right side of January 1.

That’s a timing conversation, and it’s a different conversation for a gain realized in August than for one realized in November.

The old program is ending the way programs end: quietly, on a technicality most people will read about too late. The new one is permanent, and the map is about to be redrawn across Texas.

Don’t spend the fall worried about the wrong thing.

I’d rather you hear it from me now than from your tax return in April

BOOK A STRATEGY CALL WITH DANIEL GOODWIN

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