Investors in the Opportunity Zone program approach a critical deadline of Dec. 31 to include long-deferred capital gains in taxable income. The ticking clock has set off a planning flurry as advisers help clients minimize the tax hit from deferrals that started as far back as 2018. Wealthy Americans are harvesting losses, considering accelerated charitable deductions and analyzing whether investments have declined in value.

Still, significant payments for tax year 2026 are unavoidable for many. Tens of thousands of high-income individuals participated, with $75 billion in deferred capital gains funneled into projects through 2024. Estimates suggest a one-time revenue bump of about $29 billion.

Analyses found mixed success, with investment concentrated in real estate and neighborhoods already on the cusp of development. Last year, Congress made the program permanent and boosted incentives for rural projects. States are picking new zones for investments starting next year.

Some clients had not mentioned recent deferred investments, requiring payments even without current sales. For those who owe, there are ways to lower the burden, though refinancings have slowed due to higher interest rates and struggling rental-housing markets. Dec. 31 is going to be a day of reckoning for many Opportunity Zone funds.