The Treasury Department and the IRS issued today highly anticipated proposed regulations regarding “Qualified Opportunity Zones.” The Qualified Opportunity Zone regime was introduced as part of the Tax Cuts and Jobs Act of 2017 to encourage private investment in distressed communities. Under the regime, investors that wish to defer capital gains recognized upon a sale or exchange of an asset to an unrelated party (and to derive other tax benefits) can invest that gain in a Qualified Opportunity Fund, which in turn invests in so-called “Qualified Opportunity Zone Property.” Since its enactment, industry participants have been eagerly awaiting the release of Treasury regulations to address many of the uncertainties regarding the application and implementation of the regime, particularly regarding how an entity will qualify as a Qualified Opportunity Fund. We are closely analyzing these proposed regulations and will be issuing in the near future a detailed analysis.