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
Disclosure: Cody H. Laidlaw is the Chief Investor Relations Officer of Belpointe PREP, LLC. 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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