For business owners planning a sale, one of the most common concerns is the potential income tax liability associated with the transaction. With any business sale, a significant portion of the proceeds may be subject to capital gains taxes. As a result, business owners often seek strategies designed to help mitigate taxes and preserve wealth.

Qualified Opportunity Zones

One strategy that may be worth considering is the use of Qualified Opportunity Zones (QOZs). Originally established under the Tax Cuts and Jobs Act of 2017, QOZs were designed to incentivize investment in designated underserved communities. Qualified investments into these zones provided several key benefits to investors, many of which are no longer available or scheduled to sunset at the end of 2026.

However, with the passage of the One Big Beautiful Bill Act in 2025, the QOZ program was extended and modified, creating a renewed planning opportunity for individuals considering this tax-saving strategy. Taxpayers are permitted to reinvest eligible gains into a Qualified Opportunity Fund (QOF), which then deploys this capital into investments within the approved zones.

Benefits and Considerations

Under the new rules introduced in 2025, taxpayers who reinvest gains into QOFs after Dec. 31, 2026, may be eligible for certain tax benefits. However, QOZ investments are better utilized as one component of an investor’s overall strategy, rather than the entirety of an investment plan. Rather than allocating the entirety of a gain into a QOF, it is often advisable to dedicate a portion of the proceeds to QOFs while maintaining a diversified portfolio across other asset classes.

Original reporting: KTVZ (Central Oregon) — read the source article.