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New Guidance Issued For Rural Opportunity Zone Investors
By Phil Jelsma and Ulrick Matsunaga
SAN DIEGO (November 24, 2025) – To date, the majority of opportunity zones – created by the 2017 Tax Cuts and Jobs Act to spur economic growth in underserved communities – have been situated in urban communities. But a major change introduced by the recently enacted “One Big Beautiful Bill” is the creation of a special definition for qualified opportunity zone (QOZ) investments in rural areas.
The IRS recently issued new guidance – Notice 2025-50 – related to rural opportunity zones, providing several key updates:
- Clarification of Core Provisions – including the definition of a “rural area” and how the substantial improvement threshold applies to projects located within a rural QOZ.
- Identification of Rural QOZs – confirming which areas would have qualified as at the time of the original 2018 designations.
- Reduced Substantial Improvement Requirement – lowering the substantial improvement threshold for applicable property located in rural QOZs.
CGS3 partner Phil Jelsma and associate attorney Ulrick Matsunaga recently discussed this new guidance – and its implications for investors, developers, and stakeholders focused on rural economic development – in a recent article published in The Los Angeles Daily Journal and The Daily Transcript.
The full article can be read in the Daily Journal here and The Daily Transcript here (both subscriber only).
About Crosbie Gliner Schiffman Southard & Swanson LLP (CGS3)
CGS3 is a recognized leader among a new generation of commercial real estate law firms with practice areas covering the entire commercial real estate life cycle, including finance, acquisition/disposition, entity formation, tax, construction & development, land use, leasing, distressed asset workouts and dispute resolution. Earning a reputation as one of California’s leading commercial real estate law firms, CGS3 recruits some of the state’s top real estate attorneys from both large corporate firms and senior in-house positions. For more information, visit http://www.cgs3.com.