The Internal Revenue Service is asking the public to weigh in on how Opportunity Zone tax breaks should work after the 2025 tax law rewrote them, and it wants written comments by Nov. 23, 2026. The request, Notice 2026-55, includes a question about using the program to support single-family home building, a goal set by an executive order dated March 13, 2026. It is a request for comments, not a new rule.
The people with the most at stake are investors who have capital gains to defer, developers building in designated zones, and the funds that sit between them. Anyone can file a comment, but the questions are technical: when a fund that sells homes can defer tax on the proceeds, how a business may change its spending plan, and how the 10-year rule works for investments that sit past the 30-year mark. What the IRS hears by Nov. 23 shapes the guidance that follows.
Nov. 23 is the cutoff for comments on Notice 2026-55, and it catches investors, fund managers and builders who want a say before the IRS writes the next round of Opportunity Zone guidance.
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The single-family housing question
The first item in the notice ties the tax break to housing. The notice cites Executive Order 14394 of March 13, 2026, which directs the Treasury Secretary and the Secretary of Housing and Urban Development to evaluate actions that would align federal programs with Opportunity Zone incentives “to expand investment in single-family home construction.”
The IRS breaks that into four questions. It asks what actions, within existing law, could better support HUD programs, including how Opportunity Zones could be coordinated with the New Markets Tax Credit. It asks whether it has legal authority to write rules letting a qualified opportunity fund defer income or gain from selling housing inventory if the proceeds are reinvested in its business within a reasonable period. If it does, it asks when the deferred amounts should come back into income and what limits should apply. Last, it asks whether any such deferral should be restricted to single-family home builders, and what eligibility tests and anti-abuse safeguards would be needed.
Five more topics on the comment list
Housing is only the first of six requests. The notice also asks about:
- The working capital safe harbor: whether a business may modify its plan, when, and how “substantially consistent” should be defined, and how money spent on property that may not qualify affects the 70-percent tangible property standard.
- Operating businesses: what further guidance would help them benefit, including the use of qualifying property and inventory inside a zone.
- The 10-year election and the 30-year rule: the timing and manner of the election for investments not sold by the 30-year date, how they are valued and substantiated, and changes for partnership and S corporation funds.
- Funds, businesses and inclusion events: whether more rules are needed for corporations and partnerships, whether debt-financed distributions or losses need clarification in computing deferred gain, and whether the disguised sale rules should change.
- Tribal and Alaska Native communities: how the incentive has been used there and what clarifications would encourage investment on Tribal and Alaska Native lands.
What the 2025 law changed for new investments
The notice requests comments on issues that arose after the One, Big, Beautiful Bill Act, Public Law 119-21, amended section 1400Z-2 of the tax code. The new rules apply to investments made after Dec. 31, 2026. Deferred gain must be included in income no later than five years after the qualifying investment. After five years of holding, the investor’s basis rises by 10 percent of the deferred gain, or 30 percent for a qualified rural opportunity fund.
The 10-year rule is also reworked. Under the description in the notice, basis generally equals fair market value on the date of a sale or exchange if the investment is sold before the 30-year date, and otherwise equals fair market value on the 30-year date. The notice does not use the term “10-year exclusion.”
The IRS lists the guidance already out: Notice 2025-50 on the rural area definition and the reduced substantial-improvement threshold, Revenue Procedure 2026-14 on state nominations of zone tracts effective Jan. 1, 2027, and Notice 2026-40 on the transition at the end of 2026. Proposed regulations covering sections 1400Z-2, 6039K and 6039L were published in the Federal Register on Sept. 11, 2026.
Filing a comment on Notice 2026-55 by November 23
Comments go through the federal eRulemaking portal at regulations.gov under docket IRS-2026-1156. They can also be mailed to the Internal Revenue Service, CC:PA:LPD:PR (Notice 2026-55), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. The subject line should reference Notice 2026-55, and the IRS says submitted comments will be posted to the public docket.
The notice says later comments may be considered if they do not delay guidance, but Nov. 23 is the stated date. A useful comment answers one numbered question, points to a specific provision and says what the rule should be, rather than arguing about the program in general.
Investors weighing a new Opportunity Zone fund should look at how the notice describes the five-year and 30-year rules before the Dec. 31, 2026 line. The IRS lists the notice on its Opportunity Zones page, and the notice text itself is the final word on what the agency asked.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
