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Guidance on Opportunity Zone Investments in Rural Areas (OBBB)
Guidance on Opportunity Zone Investments in Rural Areas (OBBB)
- Treasury and IRS issued Notice 2025-50 clarifying Opportunity Zone (QOZ) rules for rural areas under the One, Big, Beautiful Bill (OBBB).
- New rural definition: any area not a city/town over 50,000 population and not an adjacent urbanized area to such a city/town; applies across states, DC, and U.S. territories.
- Substantial improvement threshold reduced: for property in QOZs comprised entirely of rural areas, required additions to basis drop from 100% to 50% (effective July 4, 2025).
- Scope: Applies to tangible property in qualifying rural QOZs on/after July 4, 2025 that is being or has been substantially improved.
- Context: Of 8,764 QOZs nationwide, 3,309 are entirely rural. Further guidance is planned on the next round of OBBB-authorized zones (nominations/designations).
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By Internal Revenue ServiceGuidance on Opportunity Zone Investments in Rural Areas (OBBB)
- Treasury and IRS issued Notice 2025-50 clarifying Opportunity Zone (QOZ) rules for rural areas under the One, Big, Beautiful Bill (OBBB).
- New rural definition: any area not a city/town over 50,000 population and not an adjacent urbanized area to such a city/town; applies across states, DC, and U.S. territories.
- Substantial improvement threshold reduced: for property in QOZs comprised entirely of rural areas, required additions to basis drop from 100% to 50% (effective July 4, 2025).
- Scope: Applies to tangible property in qualifying rural QOZs on/after July 4, 2025 that is being or has been substantially improved.
- Context: Of 8,764 QOZs nationwide, 3,309 are entirely rural. Further guidance is planned on the next round of OBBB-authorized zones (nominations/designations).