On October 22, Ashley spent an hour answering live questions with no slides. These were the ones that came up most.
1. Can a valuation discount lower my December 31 bill?
Sometimes, but less often than people hope. The taxable amount is the lesser of the gain you deferred or the fair market value of your fund interest. The rules add back debt and losses allocated to you, which is why many discounts end up smaller than expected. As Ashley puts it, sometimes the juice ain’t worth the squeeze, so run the numbers before you pay for an appraisal. The new Form 8997 asks for this value, so expect to support it. Read the full answer.
2. How do I offset the bill?
The December 31 gain cannot be rolled into a new Opportunity Zone fund. Other tools can soften it: cost segregation, bonus depreciation, and solar credits, if they fit your facts and timing. See the options.
3. Will my working capital plan hold up?
For a project in an original zone that is not on the new map, Notice 2026-40 says the IRS intends to propose rules that require a written plan adopted by December 31, 2026, with at least 10% of the planned capital received and 5% spent or under binding contract by then. “Not the idea of a plan,” Ashley says. “A written plan that’s funded, committed.” How the plan works.
4. What happens to my 1.0 project if the zone does not carry over?
Your existing investment keeps its ten-year benefit. What changes is new money and new property after 2026, which is where the written plan matters. Check your tract on the OZ map first. If it made the new map, this matters much less.
“That’s a November project, folks, not a December one.”
Have a question of your own? Bring it to the next free webinar, or book a 15-minute call.
General information, not tax or legal advice. Rules change, and your facts change the answer.