Here’s How Opportunity Zones Could Help You

Keep More of What You Earn

A plain-English guide to one of the most powerful — and most overlooked — tax strategies available today.

Let’s be honest: nothing takes the wind out of a big sale quite like the tax bill that follows. You worked for years to build something valuable — a business, a rental property, a stock portfolio — and when you finally cash in, Uncle Sam shows up wanting his share. For many of our clients here in Idaho, that capital gains check to the IRS can feel like a punch in the gut.

But what if there were a way to postpone that tax bill, and potentially eliminate taxes on future growth — all while putting your money to work in communities that genuinely need investment?

That’s exactly what the Opportunity Zone (OZ) program was designed to do. And thanks to Congress making it permanent in 2025, this strategy isn’t going anywhere. In fact, it just got better.

In this article, we’ll walk you through how it works — in plain English — so you can decide if it’s worth a closer look for your situation.

What Are Opportunity Zones, Really?

In simple terms, the federal government has identified certain neighborhoods across the country — including several right here in Idaho — as areas that could use more private investment. These are called Qualified Opportunity Zones.

The deal is straightforward: if you take capital gains from a sale and reinvest them into one of these zones through a special investment vehicle called a Qualified Opportunity Fund (QOF), you can unlock some serious tax benefits.

Idaho currently has 25 designated Opportunity Zones across 21 counties, with 19 of those being rural zones. And in the second half of 2026, the state will nominate approximately 25 new zones under the updated program.

The Two Big Tax Benefits (No Jargon, We Promise)

When we sit down with clients about Opportunity Zones, we focus on two separate but related benefits:

Benefit #1: Postpone the Tax on Your Gain

Normally, when you sell an asset for a big gain, tax is due that same year. Under the OZ rules, if you take that gain and reinvest it into a Qualified Opportunity Fund within 180 days, you can elect to defer that tax.

How long can you defer? That depends on when you invest:

If you already invested in a QOF before 2027 (the “old rules”): Your deferred gain comes back into income no later than December 31, 2026.
If you invest in a QOF on or after January 1, 2027 (the “new rules”): Your deferred gain becomes taxable at the earlier of when you sell the investment or five years after you made the investment. Think of it as a rolling 5-year clock.

Plus, the new law provides a basis step-up after five years — meaning the amount of gain you actually owe tax on can be reduced.

Benefit #2: Potentially Pay Zero Tax on Future Growth

This is the one that really gets our clients’ attention.

If you hold your Opportunity Zone investment for at least 10 years, you may be able to permanently exclude the growth on that investment from federal income tax. Not deferred. Not reduced. Eliminated.

There is no other mainstream federal tax incentive that offers this outcome for long-term investors. Under the updated law, this exclusion is capped at 30 years — which is more than enough runway for most investment plans.

A Quick Example: What This Could Look Like

Let’s say you sell your closely held business in 2028 and have a $3,000,000 long-term capital gain. At a 23.8% effective rate, the approximate tax bill would be about $714,000.

Instead of cutting that check immediately, you reinvest the $3,000,000 gain into a well-structured QOF within 180 days and make the deferral election on your 2028 return.

Under the new framework:

You postpone the tax on that $3M gain until 2033 (five years later).
The 5-year basis step-up reduces how much gain you actually recognize at that point.
If the QOF investment grows to $6M by 2039 and you’ve held it 10+ years, the $3M of appreciation could be permanently excluded from federal tax.

That’s a potential $714,000 in deferred taxes plus tax-free growth on millions more. That’s real money that stays in your pocket.

Is This a Good Fit for You?

We tend to see Opportunity Zone planning work best when:

You have a significant capital gain from selling a business, real estate, stock, or crypto.
You don’t need all the sale proceeds right away for spending or other obligations.
You’re comfortable with a longer holding period (think 10+ years) and understand the investment risks.
You like the idea of putting your money to work in communities that need it as part of your overall plan.

It might be a tougher fit when:

You need immediate liquidity from the sale proceeds.
Your tax bracket is low enough that the benefit would be modest.
The available QOFs in the market don’t align with your risk profile or investment goals.

What Changed? The New Law Made It Even Better

In July 2025, Congress passed the One Big Beautiful Bill Act (OBBBA), which renewed, enhanced, and made the Opportunity Zone program permanent. Here are the highlights that matter:

The program is now permanent. No more guessing whether Congress will extend it. You can plan with confidence.
New OZ maps coming in 2027. Governors will nominate new zones starting July 2026, and those designations take effect January 1, 2027.
Enhanced rural benefits. Qualified Opportunity Rural Funds get a 30% basis step-up (vs. 10% for standard QOFs) and relaxed substantial improvement requirements. Great news for Idaho.
Stricter reporting requirements. New compliance and penalty provisions mean working with a qualified tax professional is more important than ever.

10-year exclusion still intact. The tax-free growth benefit after 10 years is preserved, capped at 30 years.

This Is Not a DIY Strategy

We want to be upfront: Opportunity Zone rules are powerful, but they are also technical and unforgiving if you miss key steps. The 180-day reinvestment deadline is strict. The QOF itself must satisfy detailed tests for qualifying assets, “original use” or substantial improvement, and ongoing compliance requirements. And the updated law added new information reporting and penalties for getting it wrong.

That’s where we come in. Our role at Berrett Tax & Finance is to:

Help you evaluate whether OZ planning makes sense in your broader financial, estate, and business picture
Coordinate with your investment, legal, and real-estate advisors to evaluate specific QOFs
Model the tax and cash-flow impact of “pay tax now” versus “OZ deferral and 10-year plan”
Handle the technical reporting and elections so that your tax benefits are preserved

If you’re anticipating a sale — or you’ve already realized significant gains this year — we’d love to sit down and walk through whether Opportunity Zones might be a smart part of your strategy, or whether a simpler approach is better for you. Either way, we’re here to help you make the best decision with the best information.

Ready to Explore Your Options?

Berrett Tax & Finance, Inc.

Jason Berrett, EA — President

Phone: (208) 887-4935

Email: jason@boisetaxadvisors.com

Office: 1943 E. Overland Rd., Suite 110, Meridian, ID 83642

Mail: P.O. Box 1365, Meridian, ID 83680

Disclaimer

This article is provided for educational and informational purposes only and does not constitute tax advice, legal advice, investment advice, or a recommendation to engage in any particular transaction. The information presented reflects our understanding of the law as of the date of publication and is subject to change. Tax laws are complex, and the application of Opportunity Zone rules depends on specific facts and circumstances that vary from taxpayer to taxpayer. Other exceptions may apply, and additional details could be relevant to your situation.

Please consult a qualified tax advisor, Enrolled Agent, CPA, or tax attorney regarding your specific circumstances before making any tax or investment decisions. Berrett Tax & Finance, Inc. does not sell, endorse, or broker any securities or investment products, including Qualified Opportunity Funds. Any mention of specific investment vehicles or strategies is for illustrative purposes only.

Circular 230 Notice: To the extent this communication or any attachment contains tax advice, it is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.