Opportunity Zone
A separate capital-gains deferral program — NOT a 1031 — that reinvests gains into designated distressed areas.
Definition
A Qualified Opportunity Zone (QOZ) is a federally designated distressed area where investing capital gains through a Qualified Opportunity Fund earns tax benefits — deferral of the original gain and potential tax-free appreciation on the new investment if held long enough. It is a distinct program from §1031: it can defer gains from selling stock or a business (not just real estate), you only reinvest the GAIN (not all proceeds), there is no qualified intermediary, and no like-kind requirement.
Why it matters
People confuse the two because both defer capital gains. They have very different rules, deadlines, and reinvestment amounts, and the QOZ timelines/benefits have specific statutory dates worth checking against current law. Marked for review: some original QOZ deferral dates have passed and rules may be updated — verify current terms with your CPA.
Related terms
General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.