There’s Still Time To Defer 2021 Capital Gains
By the time this weekly column hits your inbox, there will be just 19 days remaining until the April 18, 2022 filing deadline for personal income tax filings. From that standpoint, I want to let you know that investors are able to defer capital gains realized for the fourth quarter of 2021 until December 31, 2026 by investing in a Qualified Opportunity Zone Fund (QOF) now.
Belpointe PREP (NYSE American: “OZ”) is the only publicly listed QOF and it requires no paperwork or documentation to invest, providing you with the ability to pair off year-end gains and the opportunity for growth and income for the next five years, out to December 31, 2026, where all the capital appreciation and the majority of pass-through income may be tax-free. It can be a very timely investment for those that may have just received the unwelcome phone call from their CPA that they are facing some sizable 2021 capital gains taxes.
With much of the economy in flux as to how much inflation is going to impact various industries and business models, one area that may be well insulated is income-producing multi-family residential real estate, where rents indexed to CPI or other inflation benchmarks can bolster investment income and keep pace with inflation and with the additional prospect of asset appreciation that is typically correlated to rising funds from operations.
The old saying “charts don’t lie” is a good tell for looking at the multi-family rental market. Just before the inflation data really kicked in, the national average for median apartment rents was already moving up and to the right heading into 2022. From our standpoint, this chart pattern may build on itself.
Owning assets where inflation is a tailwind and not a headwind can narrow the choices of investment options real fast, and class A luxury apartment dwellings in cities like Nashville, TN, Sarasota/St. Petersburg, FL, Austin, TX, and the Research Triangle, NC, where Belpointe PREP is building and buying properties within opportunity zones offers, in our view, excellent potential for total return on investment.
The first filing date for personal taxes is April 18, just three weeks away, with the market in flux and the cost of everything in the form of goods and services rapidly increasing.
You are probably dealing with anxiety and confusion concerning inflation, big market fluctuations, supply shortages, and global uncertainty. But some things don’t change. For that fortunate segment of society that is generating appreciable income, I believe they want well-located, full-featured, safe and impressive housing that offers mobility in the event of a change in jobs. That is one of the highly addressable markets that Belpointe PREP targets.
Many of you might be asking what it all means for the future of your investments. And of course, what options you may now have? One compelling option is to consider reinvesting 2021 capital gains into a QOF where there are tax benefits and the potential for inflation-friendly income and growth may exist.
Cody H. Laidlaw
Editor-in-Chief
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com
Disclosure: Cody H. Laidlaw is the Chief Investor Relations Officer. Cody is also an investment advisor representative with Seaside Advisory Services, Inc. (d/b/a Seaside Financial & Insurance Services), a SEC registered investment adviser offering advisory accounts and services, and holds a long position in Belpointe PREP, LLC’s Class A units.
Important Information and Qualifications
Belpointe PREP, LLC (“Belpointe PREP”) has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (SEC) for the offer and sale of up to $750,000,000 of Class A units representing limited liability interests in Belpointe PREP. You should read Belpointe PREP’s most recent prospectus and the other documents that it has filed with the SEC for more complete information about Belpointe PREP and the offering
Investing in Belpointe PREP’s Class A units involves a high degree of risk, including a complete loss of investment. Prior to making an investment decision, you should carefully consider Belpointe PREP’s investment objectives and strategy, risk factors, fees and expenses and any tax consequences that may results from an investment in Belpointe PREP’s Class A units. To view Belpointe PREP’s most recent prospectus containing this and other important information visit sec.gov or belpointeoz.com. Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing claidlaw@belpointe.com. Read the prospectus in its entirety before making an investment decision.
This communication, including any links embedded herein, may not be distributed in any jurisdiction where it is unlawful to do so. Nothing in this communication is or should be construed as an offer to sell or solicitation of an offer to buy Belpointe PREP’s Class A units in any jurisdiction where it is unlawful to do so.
Neither Belpointe PREP nor any of its affiliates provide investment or tax advice and do not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should consult their own investment and tax advisers concerning the U.S. federal, state and local income tax consequences, as well as any tax consequences under the laws of any other taxing jurisdiction, in relation to their personal tax circumstances, which may vary for prospective investors in different tax situations.
This communication may contain estimates, projections and other forward-looking statements, typically identified by words and phrases such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of such words and other comparable terminology. However, the absence of these words does not mean that a statement is not forward-looking. Any forward-looking statements expressing an expectation or belief as to future events is expressed in good faith and believed to be reasonable at the time such forward-looking statement is made. However, these statements are not guarantees of future events and involve risks, uncertainties and other factors beyond Belpointe PREP’s control. Therefore, we caution you against relying on any of these forward-looking statements. Actual outcomes and results may differ materially from what is expressed in any forward-looking statement. Except as required by applicable law, including federal securities laws, Belpointe PREP does not intend to update any of the forward-looking statements to conform them to actual results or revised expectations.
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