Episode
Cost Segregation + Opportunity Zones 2.0: The Tax Strategy Nobody's Talking About
- Podcast
- The Tax Strategy Playbook
- Published
- Jul 7, 2026
- Duration seconds
- 2806
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Summary
On July 4, 2025, the One Big Beautiful Bill Act made Opportunity Zones a permanent part of the tax code. On June 18, 2026, the IRS released Notice 2026-40 — brand-new transitional guidance on the handoff from Opportunity Zone 1.0 to Opportunity Zone 2.0. My guest, Jason Watkins, CPA and Chair of the Novogradac Opportunity Zones Working Group, had less than 24 hours with the notice before joining me to break it down. In this episode of The Tax Strategy Playbook, Jason and I cover exactly what changed and what it means if you have a capital gain in 2026. You'll learn: ✅ What a Qualified Opportunity Fund (QOF) is and how the capital gains deferral actually works ✅ Why Opportunity Zones becoming permanent under the One Big Beautiful Bill Act matters for investors ✅ The new rolling 5-year deferral and basis step-up: 10% tax-free for urban investments, 30% tax-free for rural ✅ The tax-free 10-year exit — and why there's no bonus depreciation recapture at sale ✅ The critical 180-day investment window, and why it can stretch to nearly 21 months for pass-through gains ✅ IRS Notice 2026-40: the working capital safe harbor, the 10% raised / 5% spent test, and the December 31, 2026 deadline for Opportunity Zone 1.0 census tracts ✅ The difference between an actual inclusion event and a deemed inclusion — and why it matters if you want to redefer your gain into 2027 ✅ How an engineering-based cost segregation study stacks with OZ tax deferral on real estate acquired inside a Qualified Opportunity Fund ✅ Red flags to watch for before investing in a QOF, including the 7% IRS underpayment penalty for non-compliant funds Jason also shares data on the program's real-world impact, citing EIG research on new housing units created in Opportunity Zones since 2018 — figures worth verifying di…