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Lock-In Year-End OZ Tax Benefits Now

Two Major Benefits Expire On December 31

We are seeing a lot of interest in Belpointe PREP (NYSE American: “OZ”) from the recent listing announcement, internet marketing and the TV ad campaign that is running on Bloomberg, CNBC and Fox Business. I believe the appeal of being able to shelter capital gains, reinvest these gains in a publicly-traded partnership that strives to generate a meaningful income stream and capital appreciation from commercial and residential real estate investments is appealing to our audience of professional and retail clients.

Below, I’ve listed a number of benefits of owning Belpointe PREP (NYSE American: “OZ”), a Qualified Opportunity Fund (QOF) that already has projects in Nashville, TN, Sarasota, FL, and Tampa/St. Peterburg, FL while targeting opportunity zones in growth areas such as, Dallas, TX, Houston, TX, Austin, TX, Boise, ID and the Raleigh/Durham/Chapel Hill Research Triangle in North Carolina.

I recently noted that our executive management team just announced the acquisition of an approximately 8-acre site, consisting of two industrial buildings and associated parking, located in Nashville, TN for a little over $20 million. We currently anticipate that the property will be redeveloped into an approximately 412-apartment home community that will consist of two 7-story buildings with a 2-story parking garage plus ample surface level parking with plans to incorporate a fitness center, game room, co-working spaces, outdoor heated, saltwater swimming pool, riverfront courtyards and rooftop terraces as well as a leasing office.

I believe the Nashville project can be viewed as a template of the kind of current and future development that may be pursued by OZ. I also believe that Class-A multifamily residential income properties provide opportunity for easy rent price adjustments relative to inflation, as well as demand, appreciation and the potential for rising tax-free dividends.

In my opinion, the number one concern among most astute investors today should be the valuation destruction of assets due to inflation. With annual consumer inflation running at around 6.2%, investment-grade bonds and Treasuries can have negative returns, most stock dividends of blue-chip and large-cap growth stocks are yielding under 2%, but most REITs are still paying out regular yields.

Of the benefits of Belpointe PREP noted below, there are two that are time-sensitive. The first is the five-year deferral of taxes on capital gains realized in 2021. When QOFs first went live in 2019, the set date to defer capital gains taxes was December 31, 2026, and investors had seven years to defer taxes. December 31, 2026, is not a moving goal post. It’s when the government expects to get paid.

So, with that understanding, it’s imperative for investors to consider reinvesting their capital-gains by December 31, 2021 if they wish to receive a full 5 year deferral.

The second benefit that expires on December 31, 2021, is the 10% step-up basis for capital gains invested in QOFs. For example, a $100,000 investment made by year-end and held until December 31, 2026, will carry a forward cost basis of $110,000 thereby reducing the amount of capital gains tax due when the position is sold or when taxes are due at the end of 2026. This 10% step-up basis feature declines to 0% on January 1, 2022, so again, this is not some small item to sit on, but rather a priority that should be considered and be acted upon ASAP.

Contact Us!

Have questions about how Belpointe OZ can provide opportunities for investment appreciation, income and help you or your clients to Defer, Reduce or Eliminate Capital Gains Obligations?

Call or email us and we’ll take the time to answer all of your questions about Belpointe OZ and how reinvesting capital gains in a Qualified Opportunity Zone fund can be utilized to offset an investor’s tax obligation.

You can contact us at 203-883-1944 or IR@belpointeoz.com

Cody Laidlaw
Editor-in-Chief
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944
E: IR@belpointeoz.com