On June 14, the Treasury Department and the IRS announced the final round of Opportunity Zone designations for four additional states. The program has now designated areas in all 50 states, Washington, D.C., and five U.S. territories.

The 2017 tax law created Opportunity Zones (OZ) to draw investment to certain economically disadvantaged urban and rural areas. The law outlines special tax incentives, including exclusions from capital gains taxes, for OZ-investors.

In order to take advantage of OZs, an investment vehicle, known as an Opportunity Fund (OF), must be created by the individual or business and organized as a corporation or partnership. The Opportunity Funds must be used for the purpose of investing and must hold at least 90 percent of its assets in qualified OZ property.

Qualified Opportunity Funds are determined by the Community Development Institutions Fund (CDIF) within the Treasury Department. The process for allocations OFs is similar to that used by the New Markets Tax Credit to certify community development entities.

According to the Treasury Department, nearly 35 million Americans live in the communities designated as OZs. These areas have an average poverty rate of over 32 percent, compared with the national average of 17 percent.

Treasury and the IRS recently released Opportunity Zones Frequently Asked Questions to provide additional information on the program. More guidance is expected to be released in the coming months.

A full list of designated OZs is available here.