Did you know that federally designated rural Opportunity Zones (OZs) exist in Muskegon, Oceana, and Mason counties? These zones were created to spur economic development and job creation — and they offer some of the most powerful tax incentives available to investors, including capital gain deferrals and reductions that can reach 100% tax-free treatment when investments are held for at least 10 years.
Originally established under the 2017 Tax Cuts and Jobs Act (TCJA) as a temporary incentive, Opportunity Zones are now permanent thanks to last July’s passage of the One Big Beautiful Bill (OBBBA).
The modernized Opportunity Zone program (“OZ 2.0”) takes effect January 1, 2027, and enhances the benefits of the original program (“OZ 1.0”). Under OZ 2.0, investors can defer tax on eligible prior capital gains on a rolling 5‑year period based on the date of their OZ investment. Rural OZ investments also receive a 30% basis step‑up after 5 years, meaning investors can both defer and reduce taxable gains.
And the most powerful benefit remains: If a qualifying OZ investment is held for at least 10 years, all appreciation on that investment can be excluded from federal capital gains tax when sold or exchanged. That’s true long‑term, tax‑free growth!
Contact us today to learn how Opportunity Zones can strengthen your investment strategy and support local west Michigan communities.