‘Early sunset’ a surprise

The one piece of guidance that “surprised people is this early sunsetting of the 1.0 tracks,” said James Montague, director of PwC’s federal real estate tax practice. Prior to the release of Notice 2026-40, guidance and practitioner expectations pointed toward the original Opportunity Zone (O-Zone) designations expiring at the end of 2028. This would have created a two-year overlap with the new, permanent 2.0 tracts, allowing for a smoother transition.

The new notice eliminates that overlap, effectively ending the ability to acquire new property in original zones on December 31, 2026. After that date, new property generally cannot be acquired in an original 1.0 zone unless that specific zone is redesignated under the 2.0 program. This abrupt change “has caused people to reassess and think a little more forward in terms of what can be done today,” Montague explained.

To dig deeper, visit the original article on the Thomson Reuters blog.