The Treasury Department and IRS issued Notice 2026-40 on June 18, 2026, announcing their intent to issue proposed regulations for Qualified Opportunity Zones under Internal Revenue Code sections 1400Z-1 and 1400Z-2 as amended by the One Big Beautiful Bill Act. The notice provides transitional rules in four areas while formal regulations are drafted: how the new OZ 2.0 zones work under section 1400Z-1; investor treatment of gains realized on or before December 31, 2026 versus invested on or after January 1, 2027 (including inclusion-event gain); rules for tangible property a fund acquires after December 31, 2026 in tracts that were zones under the 2017 law but not finalized again under OBBBA; and compliance tests once a zone's zone term ends. Treasury said the final regulations are expected to apply to tax years ending after June 18, 2026 — making this the most consequential federal OZ guidance since OBBBA was enacted, and the framework fund sponsors and investors will plan the 2026-to-2027 transition around.
- kpmg.com, as of June 21, 2026
- currentfederaltaxdevelopments.com, as of June 21, 2026
Original reporting by the Opportunity Zone Invest Editorial Team for Opportunity Zone Invest, an independent OZ 2.0 research site. Facts are drawn from the primary sources cited above per our editorial standards. Nothing here is tax, legal, or investment advice. Found an error? See our corrections policy or write to Opportunity Zone Invest.
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