On October 13, 2025, the IRS and U.S. Treasury released Notice 2025-50, offering significant clarification on provisions of the Opportunity and Betterment for Business Bill (OBBB) related specifically to rural Qualified Opportunity Zones (QOZs). This update addresses long-standing questions and introduces changes that make rural investments more accessible and attractive to investors.
Qualified Opportunity Zones (QOZs) are designated economically distressed communities identified in 2018 under the Tax Cuts and Jobs Act. They were created to encourage long-term private investment in low-income areas through a range of federal tax incentives.
The new guidance focuses on:
The IRS now defines a “rural area” as:
This clearer definition enables more consistent identification of rural QOZs and expands eligibility for new investment opportunities.
A major hurdle for investors in QOZs has been the substantial improvement test, which previously required that investors improve a property by 100% of its original basis, excluding land, in order to qualify for QOZ tax benefits.
Under the new guidance:
This reduction is expected to lower the barrier to entry for rural development projects, thereby encouraging more investment in these underserved areas.
The Treasury Department and IRS have announced plans to issue further guidance on:
Understanding and leveraging Qualified Opportunity Zones—especially with these new rural provisions—can be complex but highly rewarding. At Sai CPA, we help investors, developers, and business owners:
Have questions about how these changes affect your investment strategy?
Contact Sai CPA today for expert guidance.
SAI CPA Services offers expert tax, accounting, and financial solutions with 25+ years of experience. We ensure accuracy, compliance, and growth.
Copyright © 2025 – Powered by SAI CPA SERVICES
SAI CPA Services offers expert tax, accounting, and financial solutions with 25+ years of experience. We ensure accuracy, compliance, and growth.
Copyright © 2025 – Powered by SAI CPA SERVICES