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To amend the Internal Revenue Code of 1986 to modify the rules for investments in qualified opportunity funds, and for other purposes.
To amend the Internal Revenue Code of 1986 to modify the rules for investments in qualified opportunity funds, and for other purposes.
Summary
This bill extends federal tax incentives for investments in qualified opportunity zones, which are designated lower-income areas. The bill extends the time period that investors have to make these investments from 2026 to 2036 and doubles the designation period for opportunity zones from 10 to 20 years. The bill adds new requirements for residential rental projects in opportunity zones to qualify for tax benefits, including maintaining that at least 30 percent of units house residents earning no more than the area median income and limiting annual rent increases to 3 percent. Investors in qualifying residential projects would receive increased tax benefits in the form of higher basis adjustments. These changes are effective immediately upon enactment, except for the extended designation period which applies to current designations.
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Sponsor (1)
Actions (2)
- Mar 5, 2026 Referred to the House Committee on Ways and Means. · house
- Mar 5, 2026 Introduced in House
Similar bills (6)
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Full text
IN THE HOUSE OF REPRESENTATIVES
March 5, 2026
Mrs. Cherfilus-McCormick introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to modify the rules for investments in qualified opportunity funds, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. MODIFICATION OF RULES FOR INVESTMENTS IN QUALIFIED OPPORTUNITY FUNDS.
(a) Extension of Designation Period of Qualified Opportunity Zones.—Section 1400Z-1(f) of the Internal Revenue Code of 1986 is amended by striking “10th calendar year” and inserting “20th calendar year”.
(b) Extension of Election Period.—Section 1400Z-2(a)(2)(B) is amended by striking “December 31, 2026” and inserting “December 31, 2036”.
(c) Year of Inclusion.—Subparagraph (B) of section 1400Z-2(b)(1) of such Code is amended to read as follows:
“(B)(i) December 31, 2026, in the case of an amount invested before the date of the enactment of this clause, and
“(ii) December 31, 2036, in the case of an amount invested after the date of the enactment of this clause and before January 1, 2037.”.
(d) Rules Applicable to Investments Involving Residential Rental Projects.—
(1) Increases in basis.—Section 1400Z-2(b)(2)(B) of such Code is amended—
(A) in clause (ii), by adding at the end the following new sentence: “Notwithstanding the preceding sentence, if the taxpayer invests in a qualified opportunity fund that holds any asset in qualified opportunity zone property that is a residential rental project, the basis in the taxpayer’s investment shall be increased in accordance with the preceding sentence if, and only if, at least 50 percent of the occupied residential units in the project are occupied, as of the date gain is recognized by reason of subsection
(a)(1)(B), by individuals whose income, adjusted for family size, is 100 percent or less of the area median income.”,
(B) in clause (iii), by adding at the end the following new sentence: “In the case such investment so held is an investment in a qualified opportunity fund that holds any asset in qualified opportunity zone property that is a residential rental project, the preceding sentence shall be applied by substituting ‘15 percent’ for ‘10 percent’.”, and
(C) in clause (iv), by adding at the end the following new sentence: “In the case such investment so held is an investment in a qualified opportunity fund that holds any asset in qualified opportunity zone property that is a residential rental project, the preceding sentence shall be applied by substituting ‘7 percent’ for ‘5 percent’.”.
(2) Treatment of residential rental projects as qualified opportunity zone property.—Section 1400Z-2(d) of such Code is amended by adding at the end the following new paragraph:
“(4) Treatment of residential rental projects as qualified opportunity zone property.—A residential rental project shall be treated as qualified opportunity zone property if, and only if, the project meets the following requirements:
“(A) The project meets the definition of qualified opportunity zone business property in paragraph (2)(D).
“(B) At least 30 percent of the occupied residential units in the project are occupied by individuals whose income, adjusted for family size, is 100 percent or less of the area median income during substantially all of the qualified opportunity fund’s holding period for such property.
“(C) Rent increases do not exceed 3 percent annually for any of the residential units in the project.
“(D) At least 60-day advance notice is provided with respect to any rent increase for a residential unit in the project.”.
(e) Effective Dates.—
(1) In general.—Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act.
(2) Extension of designation period of qualified opportunity zones.—The amendment made by subsection (a) shall apply to designations in effect on the date of the enactment of this Act. <all>
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