The Modernest WeHo and The Modernest Gulch View are located within federally designated Qualified Opportunity Zones—placing both developments at the intersection of real estate investment and one of the most powerful tax incentives created by Congress.
For investors, that distinction deserves attention.
Opportunity Zones were established under the Tax Cuts and Jobs Act to encourage private investment in designated communities across the United States. The premise is straightforward: investors who direct eligible capital gains into qualifying investments within an Opportunity Zone may receive significant federal tax benefits in exchange for committing capital to those communities.
And unlike many provisions of the tax code, the Opportunity Zone program was specifically designed to reward long-term investment.
The Opportunity Zone Advantage
At its core, the Opportunity Zone program can provide investors with two distinct tax advantages: treatment of an existing capital gain and potentially favorable treatment of the future appreciation generated by the new investment.
That second benefit is what makes Opportunity Zones particularly compelling.
Under the original Opportunity Zone framework, an investor who makes a qualifying investment through a Qualified Opportunity Fund and holds that investment for at least 10 years may be eligible to elect to increase the tax basis of the qualifying investment to its fair market value when it is sold.
In practical terms, that can mean federal capital gains tax on the investment's qualifying appreciation may be eliminated.
Consider a simplified example.
An investor realizes a $500,000 eligible capital gain and invests that gain through a properly structured Qualified Opportunity Fund into a qualifying Opportunity Zone investment.
Assume that investment ultimately grows from $500,000 to $1,000,000.
After satisfying the applicable Opportunity Zone requirements—including the 10-year holding period—the investor may potentially eliminate federal capital gains tax on the $500,000 of appreciation created by the Opportunity Zone investment itself.
The original $500,000 gain does not simply disappear; its tax treatment depends on the applicable OZ rules and timing. But the potential exclusion of the new appreciation is what makes the Opportunity Zone structure so unusual.
Few provisions of the federal tax code offer investors the ability to combine real estate investment, long-term appreciation and the potential exclusion of qualifying future gains.
Why 2026 Is an Important Year
The Opportunity Zone program is currently undergoing a significant transition.
The original program—often called OZ 1.0—requires deferred gains associated with qualifying pre-2027 investments to generally be recognized no later than December 31, 2026. However, investors who continue to satisfy the requirements of the program may still preserve the powerful 10-year appreciation benefit.
Meanwhile, Congress has made the Opportunity Zone program permanent, with a new OZ 2.0 framework taking effect for investments made after December 31, 2026.
Under the new framework, qualifying investments can generally receive a rolling five-year deferral of eligible gains, a 10% basis increase after five years, and the potential exclusion of qualifying Opportunity Zone appreciation following a 10-year holding period.
In other words, Opportunity Zones are no longer simply a temporary provision of the 2017 tax law.
They are becoming a permanent part of the U.S. investment landscape.
What This Means for The Modernest
Both The Modernest WeHo in Wedgewood-Houston and The Modernest Gulch View at 1107 8th Avenue South are located within Qualified Opportunity Zones.
That creates an important distinction for investors evaluating Nashville real estate.
The Modernest was already designed around flexibility: residences that can be used personally, rented for varying durations where permitted, professionally managed or self-managed, depending upon the owner's strategy and applicable rules.
The Opportunity Zone designation adds another potential layer to the investment thesis.
For an investor with a recent or anticipated capital gain—from the sale of stock, a business, real estate or another eligible asset—a properly structured Opportunity Zone investment associated with a Modernest residence may provide an opportunity to redeploy that gain into Nashville real estate while potentially accessing the federal tax benefits available under the OZ program.
But there is an important caveat:
Simply purchasing real estate located inside an Opportunity Zone does not automatically generate Opportunity Zone tax benefits.
The investment must be properly structured through a Qualified Opportunity Fund and satisfy the applicable federal requirements. Investors should work with experienced tax and legal advisors before proceeding.
Opportunity Zone vs. 1031 Exchange
This is also where Opportunity Zones become especially interesting for sophisticated real estate investors.
A 1031 exchange generally requires an investor to reinvest proceeds from qualifying real estate into replacement real estate while complying with strict identification and closing deadlines.
Opportunity Zones operate differently.
Eligible gains can arise from a broader range of assets—not just real estate—and generally only the gain must be invested to access the OZ deferral regime, rather than the entire sales proceeds.
That can make Opportunity Zones particularly relevant to entrepreneurs, business owners, executives and investors who have generated substantial capital gains outside traditional real estate.
The two strategies are not interchangeable, and neither is universally superior. They solve different tax and investment problems.
For the right investor, however, understanding both can materially change the way a transaction is structured.
A Tax Incentive Hidden in Plain Sight
The most compelling aspect of the Opportunity Zone program may be that it isn't an obscure loophole.
It is the opposite.
Congress deliberately created the incentive to encourage investors to commit long-term private capital to designated communities. And in 2025, Congress went further—making the Opportunity Zone program permanent.
That means an investor considering Nashville real estate shouldn't look only at purchase price, projected revenue or potential appreciation.
The location of the investment within the tax code can matter almost as much as its physical location.
The Modernest WeHo and The Modernest Gulch View happen to sit at the intersection of both.
For investors who already have—or anticipate generating—significant capital gains, that is a conversation worth having before the investment is made.
Explore The Modernest
The Modernest WeHo
Wedgewood-Houston | Nashville, Tennessee
Deliveries beginning December 2026
The Modernest Gulch View
1107 8th Avenue South | Nashville, Tennessee
Deliveries anticipated April 2027
To learn more about ownership opportunities and the potential investment strategies available at The Modernest, contact our sales team.
This material is provided for informational and marketing purposes only and is not intended to constitute tax, legal, accounting, investment or financial advice. Opportunity Zone benefits depend upon an investor's individual circumstances, the structure and timing of the investment, compliance with Qualified Opportunity Fund requirements and applicable federal law. Purchasing property located within a Qualified Opportunity Zone does not, by itself, qualify an investor for Opportunity Zone tax benefits. Prospective purchasers should consult their own qualified tax, legal and financial advisors.
