The Internal Revenue Service (IRS) released Notice 2025-50 to provide guidance on Qualified Opportunity Zone (QOZ) Investments in rural areas under two provisions of the One Big Beautiful Bill Act (OBBBA). Taxpayers who invest in QOZs receive certain tax benefits as an incentive to improve economic growth and job creation in underserved communities. This guidance includes information on the OBBBA’s revised definition of “rural area” and also the law’s modification of the substantial improvement threshold for improvements to property located in a QOZ that is comprised entirely of a rural area. As of July 4, 2025, the substantial improvement threshold for required additions to the basis for property located in these QOZs was reduced from 100 percent to 50 percent. A full list of designated QOZs is available in IRS Notice 2018-48.
