Deferring $1 million in a qualified opportunity fund does not necessarily mean recognizing $1 million in 2026.

Deferring $1 million in a qualified opportunity fund does not necessarily mean recognizing $1 million in 2026.

With a $150,000 earned basis increase and a supported $700,000 interest value, the illustrated inclusion is $550,000. That example assumes no debt or other basis changes. This is the effect of the "lesser-of" rule - the gain recognized in 2026 is the lesser of the remaining deferred gain or the amount the investor would recognize if they sold the investment at fair market value.

Establish the amount, apply usable offsets, then plan the cash. Paying the original-gain tax need not end the potential ten-year exclusion for appreciation.

Today's Daily Tax Planning Strategy works through the 2026 Opportunity Zone inclusion and the planning around it.

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