What are the qualified Opportunity Zones?

A qualified Opportunity Zone is a low-income census tract officially designated under Internal Revenue Code Section 1400Z-1, nominated by a state or territorial governor and certified by the U.S. Treasury and IRS, that qualifies for the tax benefits available through investment in a Qualified Opportunity Fund.

The original designation round (sometimes called "OZ 1.0") produced 8,764 census tracts across all 50 states, the District of Columbia, and five U.S. territories: Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. To be eligible for nomination, a tract generally had to show area median income at or below 70% of the state or metropolitan median, or a poverty rate of at least 20% with median family income no greater than 125% of the area median. The official list of designated tracts appears in IRS Notices 2018-48 and 2019-42, and each state nominated the maximum share of eligible tracts permitted, up to 25%. Those original designations remain in effect through the end of 2028.

Legislation has since made the Opportunity Zone program permanent and established a new, recurring designation cycle known as OZ 2.0. Governors are expected to nominate a new round of census tracts, with a new map taking effect through 2036. Until those new tracts are finalized and published by Treasury, the tracts designated under the original rounds remain the operative list for federal tax purposes.

Why the underlying zone matters for your valuation

Knowing which census tract a fund's assets sit in doesn't determine your LP interest's value on its own, but it confirms the fund qualifies for the deferral and inclusion rules under IRC 1400Z-2 that make a qualified opportunity fund valuation necessary in the first place. If you're approaching the December 31, 2026 inclusion event or need a fair market value for tax reporting, financial statements, or a partner dispute, our team prepares valuations in accordance with USPAP and Rev. Rul. 59-60 methodology to support your filing.