Key Takeaways

Opportunity Zones can defer and potentially eliminate capital gains tax. Rentmeester describes them as one of the more powerful tax benefits available, letting investors roll gains into qualified real estate and, after a 10-year hold, take the appreciation tax-free, so that "All appreciation will be tax-free to you."

The strategy is being made permanent from 2027. He explains the original 2018 program ends this year, while updated rules turn it into a perpetual program starting in 2027, with added features including more for rural development.

Any capital gain can qualify within 180 days. Gains from stocks, crypto, real estate or a business sale can be rolled in, and Rentmeester notes gains realized now, in the fall of 2026, already qualify.

It suits patient, long-horizon investors. Because money is tied up for 10 years and the deals are complex and illiquid, he says it fits multi-generational families, business sellers or sudden-wealth situations, not someone who may need the money.

The biggest risk is a bad real estate deal. Rentmeester stresses that "the investment decision always has to come first," and that tax benefits only help if layered on a genuinely good investment; otherwise it is "buyer beware."

Key Moments

00:22 - Capital gains taxes and the investor's dilemma Why big gains create as much stress as satisfaction.

02:23 - What are Opportunity Zones? The origin of the program and how zones are designated.

03:44 - The new 2027 Opportunity Zone rules How the program becomes permanent, with new features.

05:17 - How the tax benefits work Deferral, the basis step-up, depreciation and tax-free appreciation.

07:33 - The 180-day capital gains rule The window to roll gains into a qualified fund.

09:13 - Who Opportunity Zones are best for The long horizon and the investor profile that fits.

11:44 - Example: a $1 million capital gain Rentmeester's simplified walk-through of the math.

17:52 - The biggest risk: bad real estate deals Why the investment has to make sense first.

23:35 - Why 2026 capital gains could already qualify The year-end planning angle.

How to Avoid Capital Gains Tax: The Opportunity Zone Strategy Brett Rentmeester Says to Know

With US stocks near record highs, many investors are sitting on large gains and are torn between trimming and facing a capital gains tax bill. Brett Rentmeester, founder and managing director of Windrock Wealth Management, told Wealthion in August 2026 that one of the more powerful tools for managing that bill is the Opportunity Zone program, which can defer and, over time, eliminate the tax on qualifying investments. What follows is his general explanation of the strategy; it is not personalized tax, legal or investment advice, and Rentmeester himself stresses working with qualified professionals. Rentmeester's firm is part of Wealthion's advisor network.

How can you avoid capital gains tax when you sell?

There is no magic eraser, but Rentmeester says several strategies exist beyond the usual year-to-year tax-loss harvesting, which he notes "only goes so far." For a large gain, or the sale of a business, he points to more sophisticated planning, and singles out Opportunity Zones as one of the more advantageous approaches. In short, an investor can roll a capital gain into a qualifying Opportunity Zone real estate investment to defer the tax now and, if the investment is held long enough, avoid tax on its future appreciation entirely. It is one method among several, and whether it fits depends heavily on individual circumstances.

What are Opportunity Zones?

Rentmeester explains that the program began in 2018, when each state was allowed to designate certain zones, generally lower-income zip-code areas, where it wanted to attract investment. Investors who develop real estate or businesses in those zones and hold for at least 10 years can ultimately exit tax-free, which he calls a huge incentive. The original 2018 program ends this year, but he says updated rules make it a perpetual program starting in 2027, with additional features, including more emphasis on rural development. (These 2027 provisions are Rentmeester's description of new rules and should be confirmed against current IRS guidance and a tax professional before relying on them.)

How do the Opportunity Zone tax benefits work?

Rentmeester breaks it into two parts. The first is the rollover: if you fund the investment with a capital gain triggered in the prior 180 days, you can defer the tax on that gain for up to five years, and receive a 10% step-up in basis, meaning 10% of the gain is never taxed. The second is the property itself. You must build or substantially improve it (broadly, doubling the cost basis), and in return the appreciation becomes tax-free after a 10-year hold, "All appreciation will be tax-free to you." On top of that, he says, you can take depreciation deductions against ordinary income along the way, and, unlike normal real estate, you do not have to recapture that depreciation when you sell, which he calls another benefit in the equation.

What is the 180-day capital gains rule?

The 180-day rule is the window to act. Rentmeester says any capital gain qualifies, from selling stock, cryptocurrency, real estate or an operating business, as long as you roll it into a qualified Opportunity Zone within 180 days. Importantly, he notes this is available now even though the perpetual program starts in 2027: "any capital gains that are happening now in the fall of 2026 qualify" to be rolled in and taken off your 2026 tax return, which makes it relevant for year-end planning.

Who are Opportunity Zones best for?

Because the money is tied up for at least 10 years in an illiquid, complex investment, Rentmeester is clear about the profile. It works best, he says, for true multi-generational wealth families, someone selling a business who is thinking about the next generation, or a sudden-wealth situation such as an early employee whose company went public, in each case people who will not need the money for a decade or more. For an average investor who may need to draw on the funds, he cautions, the trade-off may not be worth it. This connects to his broader thinking on how to pass wealth to your kids the right way.

What could a $1 million capital gain look like?

Rentmeester offers a simplified illustration (excluding state taxes and using round assumptions; the actual outcome depends on the specific facts). Start with a $1 million stock gain for a top-bracket taxpayer, who would normally owe about $200,000 at a 20% long-term rate. Rolled into an Opportunity Zone, the tax is deferred five years and 10% is stepped up, so roughly $20,000 of the tax disappears and the rest is not due for five years. Put that deferred tax money to work at, say, 10% a year, and he estimates the use-of-money plus the step-up is worth on the order of $120,000. Separately, on the property, he sketches a $1 million equity investment leveraged into a $2.5 million building, which might generate roughly $800,000 of depreciation-related tax benefit over time and, growing at an assumed 10% a year, produce about $4 million of appreciation that is tax-free after a 10-year hold. This is where, he says, you "turn a good investment into a great investment." These figures are his hypothetical assumptions, not projections.

What is the biggest risk?

For Rentmeester, the danger is chasing tax benefits into bad real estate. "The investment decision always has to come first," he says, because the tax advantages only work when layered on top of an investment that already makes economic sense. He draws a pointed historical parallel to the late 1980s, when tax-driven real estate deals that did not make sense contributed to the savings and loan crisis, and warns that many Opportunity Zone offerings will be built around the tax outcome rather than sound economics, perhaps 80% to 90% of them. His verdict is blunt: it is "buyer beware."

How should investors evaluate Opportunity Zone deals?

Rentmeester's guidance is to start with the fundamentals: find good sponsors and operators with projects that make sense, an apartment building only works if people want to live there, a medical building only if it draws patients from the surrounding area. He notes deals will come both as single projects and as diversified funds spanning multiple states, and that state district maps are being finalized through the fall. Above all, he cautions against going it alone, since "the devil is in the details" and a single misstep in how a deal is structured can disqualify all the tax benefits. Investors, he says, should work with the right team, including qualified accountants, and confirm the strategy fits their specific situation. For related context on tax-aware investing, see his view that a diversified portfolio can be an expensive index fund, and Chris Casey of the same firm on why your 401(k) may not be as safe as you think.

What Investors Should Watch

• State Opportunity Zone maps: the districts being finalized through mid-to-late fall, which determine where deals can happen.
• The 180-day window: the deadline to roll a capital gain into a qualified fund, including 2026 gains.
• The 10-year hold and illiquidity: the commitment required to reach the tax-free appreciation.
• Sponsor and operator track record: the quality and experience Rentmeester says is essential.
• Whether the deal makes economic sense first: his central test before any tax benefit is considered.

FAQ

How can you avoid capital gains tax when selling investments? Brett Rentmeester says there is no single eraser, but strategies exist beyond tax-loss harvesting. He highlights Opportunity Zones, which let you roll a capital gain into qualifying real estate to defer the tax and, after a 10-year hold, take the appreciation tax-free. This is a general explanation, not personalized advice; consult a qualified tax professional.

What are Opportunity Zones? They are areas each state designates, generally lower-income zip codes, to attract investment. Investors who develop or substantially improve real estate there and hold for at least 10 years can exit tax-free. Rentmeester says the program becomes permanent starting in 2027.

How do the Opportunity Zone tax benefits work? According to Rentmeester, rolling a recent capital gain in defers the tax up to five years and steps up 10% of the gain tax-free, while the underlying property offers depreciation deductions with no recapture and tax-free appreciation after a 10-year hold.

What is the 180-day rule? Any capital gain, from stocks, crypto, real estate or a business sale, can qualify if rolled into a qualified Opportunity Zone within 180 days. Rentmeester notes gains realized in the fall of 2026 already qualify.

Who are Opportunity Zones best for? Because the money is illiquid for 10 or more years, Rentmeester says they suit multi-generational families, business sellers and sudden-wealth situations, not investors who may need the money sooner.

Which expert and interview does this article reference? This article draws on Wealthion's interview with Brett Rentmeester, founder and managing director of Windrock Wealth Management: "Before You Sell: The Capital Gains Move to Know."

Full Transcript (cleaned)

Speakers: Maggie Lake (Wealthion host) and Brett Rentmeester (founder and managing director, Windrock Wealth Management). ASR errors corrected and filler removed; meaning preserved. Opening and mid-interview membership and free-consultation messages have been noted rather than reproduced.

Brett Rentmeester (cold open): Let's just say you develop an apartment building and you hold it for 10 years. All appreciation will be tax-free to you. That's where you turn a good investment into a great investment. But it is buyer beware. Any capital gains that are happening now in the fall of 2026 qualify.

Maggie Lake: Hello everyone. Welcome to Wealthion. I'm Maggie Lake. Joining me today to discuss how to best manage capital gains taxes is Brett Rentmeester, founder and managing director of Windrock Wealth Management. Hi Brett, great to see you again. [A free-consultation message was noted here.]

Brett Rentmeester: Nice to see you, Maggie.

Maggie Lake: We're sitting at record highs in US equities, and a lot of investors are sitting on big gains, caught between wanting to take some off the table and the capital gains taxes that come with it. What are you telling clients?

Brett Rentmeester: That's the age-old debate. People know intuitively they should trim and take some gains, but it's hard to pay the tax piper. It's a good problem, making money, but it causes real stress and needs to be managed. In a normal year-to-year context you manage it by working with an adviser who takes tax losses in other positions so you can sell some gains, and by managing timing from one year to the next. But that only goes so far. If you're sitting on a big gain, or selling a business with a big gain, that requires more sophisticated planning. One of the more interesting tools is the Opportunity Zone rules coming into effect in 2027.

Maggie Lake: For those hearing about this for the first time, what are they?

Brett Rentmeester: Back in 2018 they started a program where every state could designate so-called Opportunity Zones, areas where they wanted investment dollars to flow to benefit a community. Think of each state with a map of its zip codes, picking ones that fit certain rules, below certain average income levels, for example. By designating those zones, the rules let people invest in businesses or, more commonly, real estate, and if they developed and held the property for 10 years or more, they could essentially exit that investment tax-free. It was a huge incentive for real estate projects in those zip codes, not all of which were bad areas, just areas states wanted to steer development toward. That began in 2018 as a one-time program that ends this year. The exciting thing is the rules have been updated so it becomes a perpetual program starting in 2027, with a lot of bells and whistles. It's one of the more powerful tax benefits we've seen combined with investing.

Maggie Lake: It sounds a little like municipal bonds, a tax benefit for investing where governments want capital, but different. What are the pros and cons?

Brett Rentmeester: Muni bonds give you federally tax-free income, which is great, but usually at a lower interest rate. This is different, and it has two component pieces. First, you have to do a real estate project in the zone and actually build or substantially improve something; you can't just buy an existing building and claim the benefits. Broadly, you have to double the cost basis, put in about double the value of the property, and there are some different rules this time for rural developments. The benefits: if you develop, say, an apartment building and hold it 10 years, all the appreciation is tax-free to you, like a muni bond in that the gain is tax-free, but with the potential for much larger percentage gains. Second, there's depreciation, which anyone who has owned a rental knows: you slowly write off the value of the property, excluding land, over the years you own it. In normal real estate you take that deduction against ordinary income now, at higher rates, and then recapture it as income when you sell, at a lower rate, so there's a rate arbitrage and a time-value benefit. Here you still get the depreciation deduction along the way, but at the back end you don't have to recapture it, another benefit. And then, separate from the property, if you fund the investment with capital gains you triggered in the prior 180 days, they let you defer the tax on that rolled-in gain for up to five years, with a 10% step-up in basis, which in plain terms means 10% of the gain is never taxed, and you have five years to pay the tax on the rest. Over those five years you can at least earn interest on that money.

Maggie Lake: [A membership message was noted here.] It sounds like a lot of benefits. Can you walk through an example you've used with a client?

Brett Rentmeester: Sure, and at Windrock we've done a number of these over the years and plan to do more, because the tax benefits are advantageous. But first, back to the negatives: you're tying up your money for 10 years in an illiquid, complex investment. This works best for a true multi-generational wealth family, or someone selling a business who doesn't need the money and can park it for 10-plus years. For an average person with some gains, it may be tax-attractive, but when you look at what you have to tie up and for how long, it may not be worth it.

Maggie Lake: That's an important point. Time frame always matters, so this is for folks who won't need to touch the money for 10 years.

Brett Rentmeester: That should be the mindset. It could also fit someone with sudden wealth, an early employee whose company went public, who won't need the money for a decade. And it's dynamic: any capital gains qualify, from selling real estate, stocks, cryptocurrencies, or an operating business.

Maggie Lake: Walk us through the math.

Brett Rentmeester: Start with someone who sells a stock with a $1 million capital gain, in the highest bracket. Ignoring state taxes to simplify, they'd normally pay a 20% long-term rate, so $200,000. Now say they move that $1 million of gain into an Opportunity Zone. They still owe tax on the gain, but they have five years before paying, and 10% of the tax goes away, so of the $200,000, about $20,000 disappears via the step-up as long as they hold at least five years. Think of money as fungible: you now have roughly the $200,000 you'd have paid in tax, not due for five years. Invest it at, say, 10% a year, and over five years that's roughly $100,000, plus the $20,000 you shaved off, so about $120,000 you wouldn't otherwise have had. Then you owe tax on the remaining 90%, $180,000 instead of $200,000. So the rollover gives you use of your tax money for five more years. Now the bigger piece: you put $1 million into a real estate project, but most people use debt. Say your $1 million of equity is 40% of the deal and you borrow $1.5 million, so you own a $2.5 million property. You get to depreciate it, say 80% of $2.5 million, about $2 million, and at roughly a 40% marginal rate that's about $800,000 of tax benefit along the way. Then appreciation: assume 10% a year over 10 years, and the $2.5 million property grows to about $6.5 million. You sell, pay back the $1.5 million of debt, leaving $5 million; subtract your original $1 million, and the gain is about $4 million, which is totally tax-free under these rules if held at least 10 years. You can hold up to 30 years for extra benefit. There aren't many tax-free assets in the code.

Maggie Lake: Is there a chance it doesn't work out? How do you decide which projects look good?

Brett Rentmeester: You have to find good sponsors or good operators with projects that make sense, and that's maybe the most important point: the investment decision always has to come first. All these tax benefits only work if they're layered on top of what's already a good investment. We saw in the late 1980s that some tax rules incentivized real estate deals that didn't make sense, and that ultimately contributed to the savings and loan crisis. So I expect a lot of people to chase bad deals that look good on paper because of the tax benefits, even when the economics don't pan out. If you find the right project in a good area and layer on the tax benefits, you turn a good investment into a great investment. But it is buyer beware.

Maggie Lake: We're also in a period where capital is being siphoned into AI projects, so it may be hard to compete.

Brett Rentmeester: A lot depends on each state and the districts they draw, which is happening now; Arizona already has many of its districts mapped, others have until mid-to-late fall. Under the 2018 map there were huge areas in downtown cities that qualified, which was a big opportunity because there's activity in cities. Some areas won't be attractive even with the tax benefit. It comes down to the zones and the type of real estate: an apartment needs people who want to live there, a medical building might draw patients from surrounding zip codes. You'll see single-project opportunities and diversified funds that invest in a basket of properties, even across states. Last time there were good projects, but a lot of funds were assembled mainly for the tax benefits, so you have to be careful. I'd generalize that maybe 10% of the opportunity set will be genuinely good and 80% to 90% will be tax-motivated, which can push you in a bad direction.

Maggie Lake: So perhaps best not to go it alone, given the complexity. Simply Googling an Opportunity Zone near you may not be the best path.

Brett Rentmeester: That's right. Even simplified, there are a lot of moving pieces, and the law is complicated. You have to make sure the operators and the structure are done by the book with the right accountants, because one slip-up can disqualify it from all the tax advantages. So investors really need to work with the right crew to find qualified Opportunity Zones and make sure it fits their situation.

Maggie Lake: And there will be operators who develop a track record, which will matter. Great stuff, Brett. Especially heading into year-end and thinking about tax implications.

Brett Rentmeester: One last thing, Maggie: even though this starts in 2027, you can roll any capital gains you have into these within 180 days, so any capital gains happening now, in the fall of 2026, qualify to be rolled into an Opportunity Zone in 2027 and taken off your 2026 tax return. So you can actually shelter or defer gains happening right now. Investors should at least have that in mind.

Maggie Lake: Great stuff. Thanks so much, Brett.

Brett Rentmeester: Take care, Maggie.