The guidance comes just weeks before the midterm elections. The GOP has struggled to sell its tax law to voters as the party tries to hold onto its House majority.
The proposed regulations clarify which only capital gains are eligible for preferred tax treatment. Investors who can participate include individuals, corporations, businesses, REITs, in addition to also estates in addition to also trusts. Treasury said additional guidance will be released before the end of the year, with final rules likely to come inside spring.
“We felt the idea was important to issue the core guidance right now which’s needed to get the funds up in addition to also operating in addition to also not wait until we have every question answered,” said a senior Treasury official who declined to be named.
Read more: ‘Opportunity zones’ are well-known with investors, nevertheless they might offer less benefit to voters
One key outstanding issue will be how much flexibility the funds will have to buy in addition to also sell assets within an opportunity zone. The official said which will be part of the second round of guidance.
Still, some investors are already setting up funds amid early interest inside completely new program. Craig Bernstein of OPZ Capital said he has “soft-circled” $50 million in funding, in addition to also which demand has been high among families who have been reluctant to sell their businesses or significant shares of stock because of the tax implications.
“I think these regulations are going to free up in addition to also unlock a lot of capital which has been sitting on the sidelines waiting to get involved,” Bernstein said.
States have designated more than 8,700 Census tracts as opportunity zones, including nearly all of Puerto Rico. The average poverty rate inside zones will be 32 percent, compared with the national average of 17 percent.
The American Investment Council, which represents private equity investors, said the idea will be reviewing the regulations nevertheless has welcomed the idea.
“The private equity industry supports Opportunity Zones in addition to also looks forward to playing a role as This kind of important program moves forward,” AIC President Drew Maloney said in a statement to CNBC. “Our members have a successful record of investing in communities across America, supporting millions of jobs, in addition to also strengthening local economies.”
WATCH: Trump agenda, attitude overshadow tax cuts