Introduction

At Fortitude Investment Group, we’re thrilled to share the transformative opportunities presented by Qualified Opportunity Zones (QOZs), especially with the recent passage of President Trump’s One Big Beautiful Bill Act (OBBBA) on July 4, 2025. This landmark legislation has made the QOZ program a permanent fixture of the tax code, introducing updated rules that enhance its appeal for accredited investors. Through our properties platform on 1031dst.com, we offer access to QOZ investments syndicated by large, well-known real estate institutions, providing a powerful vehicle for tax-advantaged wealth building. Let’s explore how these new regulations can benefit you and why Fortitude is your trusted partner in this space.

The QOZ Program: A Permanent Path to Tax Efficiency

Introduced in the 2017 Tax Cuts and Jobs Act, the QOZ program encourages investment in economically distressed communities by offering significant tax incentives. The OBBBA has solidified its permanence, ensuring long-term opportunities for investors to defer and potentially eliminate capital gains taxes. By investing through Qualified Opportunity Funds (QOFs), which Fortitude carefully curates in partnership with leading real estate institutions, you can tap into institutional-quality real estate while optimizing your tax strategy.

Key Changes Under the One Big Beautiful Bill

The OBBBA introduces several game-changing updates to the QOZ program, effective for investments made on or after January 1, 2027. Here’s how these changes can work for you:

Permanent Tax Incentives

The OBBBA makes the QOZ program a permanent part of the federal tax code, eliminating the previous sunset date of December 31, 2026. This ensures that investors can confidently plan long-term strategies without worrying about the program’s expiration. Additionally, states will re-evaluate QOZ designations every 10 years, starting July 1, 2026, to align with current economic conditions, maintaining the program’s relevance.

Rolling 5-Year Deferral Period

Under the new rules, capital gains invested in a QOF can be deferred for up to five years from the date of investment or until the investment is sold, whichever comes first. This rolling deferral replaces the fixed December 31, 2026, deadline for pre-2027 investments, offering greater flexibility. For example, a 2027 investment could defer taxes until 2032, providing a longer runway to grow your wealth tax-free.

10-Year Capital Gains Tax Exemption

One of the most compelling benefits remains: if you hold your QOF investment for at least 10 years, the appreciation on that investment is entirely exempt from federal capital gains tax. The OBBBA extends this benefit, with a new cap at 30 years, after which the basis is stepped up to the fair market value. This allows investors to realize significant tax-free growth, particularly in high-potential real estate projects syndicated by Fortitude’s trusted partners.

10% Basis Step-Up After 5 Years

For investments held for at least five years, the OBBBA provides a 10% step-up in basis on the deferred capital gains, reducing the taxable amount when the deferral period ends. For Qualified Rural Opportunity Funds (QROFs), this step-up increases to an impressive 30%, making rural investments particularly attractive. Fortitude’s QOFs include both standard and rural opportunities, allowing you to choose the strategy that best fits your goals.

Enhanced Rural Incentives

The OBBBA introduces Qualified Rural Opportunity Funds (QROFs), which must invest at least 90% of assets in rural QOZ tracts (areas not in or adjacent to towns with populations over 50,000). In addition to the 30% basis step-up, rural projects benefit from a reduced “substantial improvement” threshold—50% of the property’s adjusted basis compared to 100% for non-rural projects—making it easier to qualify. 

Why Fortitude Investment Group?

Fortitude Investment Group stands out by offering QOZ investments syndicated by large, well-known real estate institutions, who take pride in their quality, stability, and expertise. Here’s why investors choose us:

• Institutional-Quality Investments: Our QOFs are backed by reputable sponsors with proven track records, offering diversified portfolios in multifamily, commercial, and rural real estate.
• Expert Guidance: With over $1 billion in securitized real estate investments guided since 2000, our team, led by industry veteran Daniel P. Raupp, provides unparalleled expertise.
• Comprehensive Support: We work alongside your legal and tax advisors to tailor QOZ strategies to your financial objectives, ensuring compliance with IRS regulations.

Conclusion

The One Big Beautiful Bill Act has transformed the Qualified Opportunity Zone program into a permanent, flexible, and powerful tool for tax-advantaged investing. With a rolling 5-year deferral, a 10-year capital gains tax exemption, a 10% basis step-up (or 30% for rural QROFs), and Fortitude’s access to syndicated investments from large, well-known real estate institutions, there’s never been a better time to explore QOZs. Ready to unlock these opportunities? Reach out today—we’re here to guide you every step of the way!

Risks to Consider

QOZ investments, while tax-advantaged, carry risks such as market volatility, illiquidity, and potential loss of principal. The new reporting requirements under the OBBBA, with penalties up to $50,000 for non-compliance, underscore the need for experienced sponsors. Fortitude’s partnerships with leading institutions mitigate these risks through rigorous due diligence and transparent reporting. Always consult your CPA and legal advisors to ensure QOZs align with your goals.

QOZ investments are available only to accredited investors (typically those with a net worth over $1 million, excluding primary residence, or income exceeding $200,000 individually/$300,000 jointly for the last three years). Consult your legal and tax advisors before investing.