Opportunity Zone Calculator (2026 and 2027 Rules)
Put a capital gain into a qualified opportunity fund and see when the tax comes due, the basis step-up you earn, the tax when you sell, and what you keep against paying the tax now. Old rules for money invested by December 31, 2026; new rules (P.L. 119-21) from January 1, 2027. Federal only.
By Hans Goldstein, EA · Updated October 13, 2026 · Rules read from the statute and IRS Notice 2026-40
After-tax value $2,701,015 in the fund against $2,244,980 invested outside an Opportunity Zone, same 5% growth.
Your timeline
- Rules that applyNew rules (invested in 2027 or later)
- Gain on the sale$2,000,000
- Invested in the fund (postponed)$2,000,000
- Taxed in 2026 (not invested)$0
- Basis step-up at 5 years (10%)$200,000
- Gain included in 2032$1,800,000
- Fund value after 10 years$3,257,789
- Growth taxed at the sale (10-year election)$0
The federal tax, year by year
- Tax in 2026 on the gain not invested$0
- Tax in 2032, year 5 inclusion, after the 10% basis step-up$436,247
- Tax in 2037, sale after 10 or more years (10-year election)$0
- Federal tax, Opportunity Zone path$436,247
- Federal tax without it (2026 plus 2037)$708,520
Get the REAL numbers
Talk to Opportunity Zone tax expert Hans Goldstein, EA
Why now: your 180 days run from the sale date, and whether you invest by December 31, 2026 or on January 1, 2027 or later changes which rules you get. Both are set before you wire the money.
These are estimates. Have a qualified tax professional run your real numbers in a 15-minute scope call.
Book my 15-minute callThis is an estimate. Getting it right down to the tee takes your actual tax forms (returns, K-1s, depreciation schedules), a consult and a paid analysis. The first 15-minute scope call is free.
How the Opportunity Zone calculator works
An Opportunity Zone investment does three things to a capital gain: it postpones the tax on the part you invest within 180 days, it can shave part of that gain off with a basis step-up, and after 10 years it can make the growth on the fund itself tax free. The 2025 tax law (P.L. 119-21, signed July 4, 2025) kept the program and changed the first two for money invested after December 31, 2026. The calculator applies whichever set of rules your investment date puts you under, prices each tax event with the 2026 federal brackets (IRS Rev. Proc. 2025-32) and the 3.8% net investment income tax, and compares the result with paying the tax now and investing the rest outside a zone at the same growth rate.
Worked example: a $2,000,000 gain sold November 2, 2026 (computed October 13, 2026)
A married couple sells an investment property on November 2, 2026 with a $2,000,000 long-term gain and $250,000 of other income a year. They put the whole gain into a qualified opportunity fund, it grows 5% a year, and they sell the fund interest after 10 years.
| Invested | Tax on the postponed gain | Tax at the 10-year sale | After-tax value | Kept vs no fund |
|---|---|---|---|---|
| December 15, 2026 (old rules) | $483,847 for 2026 | $0 | $2,469,653 | $224,673 |
| January 15, 2027 (new rules) | $436,247 for 2032 | $0 | $2,701,015 | $456,035 |
| January 15, 2027, rural fund | $341,047 for 2032 | $0 | $2,822,517 | $577,537 |
| No fund: tax paid in 2026, rest invested | $483,847 for 2026 | $224,673 | $2,244,980 | $0 |
Six weeks of timing is worth $231,362 here. Invested in December 2026, the gain is taxed for 2026 anyway, the same year as the sale, so the only benefit left is the tax-free growth after 10 years. Invested in January 2027, the tax waits until 2032 and only 90% of the gain ($1,800,000) is taxed. The $436,247 due in 2032 has to come from other cash: the fund is not sold. Taxes paid along the way are counted with the growth that cash would have earned at the same 5%.
The rules the calculator applies
| Rule | What it says | Source |
|---|---|---|
| Which gain qualifies | Capital gain, or qualified Section 1231 gain above the depreciation recaptured as ordinary income; not from a sale to a related party | Treas. Reg. 1.1400Z2(a)-1(b)(11)(i), (iii); IRC 1400Z-2(e)(2) |
| The window | 180 days, starting the day the gain is recognized; only the amount you invest is postponed | IRC 1400Z-2(a)(1)(A); Treas. Reg. 1.1400Z2(a)-1(b)(7)(i) |
| Invested by December 31, 2026 (old rules) | The postponed gain is taxed for the tax year that includes December 31, 2026 (or an earlier sale); no basis step-up can be reached by then; the gain cannot be postponed again | Prior IRC 1400Z-2(b)(1)-(2); Notice 2026-40 sec. 4.01(1)-(2) |
| Old rules, held 10 years | Election: basis equals fair market value when sold, so the growth is tax free; covers sales before January 1, 2048 | Prior IRC 1400Z-2(c); Notice 2026-40 sec. 4.01(3), 5.02(1) |
| Invested in 2027 or later (new rules) | Applies to amounts invested after December 31, 2026, including 2026 gain invested in 2027 inside the 180 days | P.L. 119-21, sec. 70421(c)(5)(A); Notice 2026-40 sec. 4.02(1)-(2) |
| New rules, when the gain is taxed | The earlier of a sale or 5 years after the investment | New IRC 1400Z-2(b)(1), as amended by P.L. 119-21, sec. 70421(c) |
| New rules, how much is taxed | Lesser of the postponed gain or the fund's value, minus basis; basis steps up by 10% of the postponed gain at 5 years, 30% in a qualified rural opportunity fund | New IRC 1400Z-2(b)(2)(A)-(C) |
| New rules, held 10 years | Election: basis equals fair market value when sold, or the value at year 30 if held longer | P.L. 119-21, sec. 70421(c)(3); Notice 2026-40 sec. 5.02(1) |
| Character and rate | The included gain keeps its character and is taxed at the rates of the year it is included; the 3.8% net investment income tax is applied by the calculator on that basis | Treas. Reg. 1.1400Z2(a)-1(c)(1)(i)-(ii) |
| Zones | New zone designations start January 1, 2027 on rolling 10-year terms; the current zones end December 31, 2028 | P.L. 119-21, sec. 70421(a)-(b); Rev. Proc. 2026-14; Notice 2026-40 sec. 2 |
All sources read October 13, 2026.
What the calculator does not do
- Federal only. State conformity to the Opportunity Zone rules and to the 2025 changes varies and is not modeled; your state may tax the gain in the year of the sale.
- Future rates. Tax years after 2026 use the 2026 brackets (IRS Rev. Proc. 2025-32) carried forward. Congress can change them.
- Rules still being written. Treasury and the IRS say proposed regulations are coming (Notice 2026-40). Notice 2026-55 asks for comments through November 23, 2026, including on how the 30-year election works. Treas. Reg. 1.1400Z2(a)-1(b)(11)(i)(B) still reads "before January 1, 2027"; the statute and Notice 2026-40 control until it is updated.
- The fund has to qualify every year. It must hold at least 90% of its assets in qualified opportunity zone property, tested twice a year. A fund that fails can lose the benefits.
- Illiquid. The money is locked in the fund for the years you hold it, and the tax due at year 5 needs cash from elsewhere.
- Growth is a guess. The rate you enter is illustrative. The calculator assumes the fund is worth at least what you put in when the gain is included; a fund that has lost value is taxed on less.
- Short-term gain, partial sales of the fund, gifts and deaths (inclusion events) are not modeled.
Related: qualified opportunity zone funds · business sale tax calculator · 1031 exchange calculator · all calculators
Opportunity Zone questions
How does an Opportunity Zone calculator work?
It takes the gain from your sale, the amount you invest in a qualified opportunity fund and the date you invest, then works out when the postponed gain is taxed, the basis step-up you earn, the tax when you sell the fund, and what you keep compared with paying the tax now and investing outside a zone. This one uses the 2026 federal brackets (IRS Rev. Proc. 2025-32) carried forward and is federal only.
What changed for Opportunity Zones in 2025?
The July 4, 2025 tax law (P.L. 119-21, sec. 70421) made the program permanent. For amounts invested after December 31, 2026, the postponed gain is taxed 5 years after the investment (or at an earlier sale) instead of on a fixed date, the basis steps up 10% at 5 years (30% in a qualified rural opportunity fund), and the 10-year election is capped at the value at year 30.
If I sell in 2026, should I invest in 2026 or 2027?
A 2026 investment uses the old rules: the postponed gain is taxed on December 31, 2026, so for a 2026 sale there is no real delay and no step-up; only the 10-year growth benefit is left. If your 180 days run into 2027, investing on or after January 1, 2027 puts you under the new rules (IRS Notice 2026-40, sec. 4.02): 5 years of delay and a 10% step-up. Enter both dates in the calculator to compare.
When is the Opportunity Zone tax due under the new rules?
For the tax year that includes the 5-year anniversary of your investment, unless you sell the fund interest first. The fund does not pay it for you, so plan the cash: the calculator shows the year and the amount.
Does the 3.8% net investment income tax apply to Opportunity Zone gain?
The regulations say the included gain is taxed under the same federal income tax provisions and rates as if it had not been postponed (Treas. Reg. 1.1400Z2(a)-1(c)(1)), so the calculator applies the 3.8% tax when your income is over the threshold. There is no Opportunity Zone rule written specifically for it.
Does my state follow the Opportunity Zone rules?
Not all states follow, and conformity to the 2025 changes varies. This calculator is federal only; your state may tax the gain in the year of the sale. Ask your CPA before you count on a state benefit.
Sources
- Public Law 119-21, section 70421 (July 4, 2025), Opportunity Zone amendments: govinfo.gov
- IRC 1400Z-2, text before the 2027 amendments: Cornell LII
- IRS Notice 2026-40, transitional guidance on qualified opportunity zones (July 2026): irs.gov
- IRS Notice 2026-55, request for comments, due November 23, 2026: irs.gov
- Rev. Proc. 2026-14, zone designations from January 1, 2027: irs.gov
- Treas. Reg. 1.1400Z2(a)-1, eligible gain, the 180 days and character of included gain: eCFR
- IRS Rev. Proc. 2025-32, 2026 brackets and capital gain breakpoints (October 2025): irs.gov
Educational estimate only, not tax, legal or investment advice, and not a recommendation of any fund. Federal income tax and the 3.8% net investment income tax only; figures use 2026 federal law (Rev. Proc. 2025-32) carried forward. Your CPA should confirm any number before you act. Hans Goldstein, EA.