Last Chance To Roll 2021 Profits Into Opportunity Zone Funds
This week demands the attention of investors that booked K-1-related capital gains (short or long-term) in 2021 and are looking for intelligent options on how best to prolong payment of the taxes on those gains. Fortunately, there is a smart strategy that directly addresses this very specific situation—investing in Qualified Opportunity Zone Funds (QOFs) that defer tax obligations on those gains out to December 31, 2026.
Even better, all dividend income and capital appreciation earned during the time you’re invested in a QOF is potentially tax free until the end of 2047 when the Opportunity Zone program sunsets. This is a once-in-a-generation opportunity that is drawing billions of dollars of capital from likeminded investors seeking shelter from current tax obligations and the potential for tax-free compounded growth for the next 25 years. Think about it.
September 9th is a major deadline for investors who realized a capital gain in 2021. For those with K-1-related gains—e.g., from a partnership in real estate, hedge fund related activity, or a private equity disposition—they have 180 days from March 15, 2022, to reinvest those gains into a QOF in order to qualify for the 2021 tax deferral.
It is incumbent upon tax planners, CFAs, CPAs, and RIAs to fully maximize all tax-advantaged strategies for their clients. Acting on this significant deadline can potentially deliver clients outsized tax savings on gains that would otherwise be current obligations. For some, the savings will be nominal and for others, they can be huge. The point is that ten thousand dollars saved is ten thousand dollars earned.
Many investors may wonder how they can get in on the remaking of oftentimes distressed communities while also being eligible to receive tax breaks traditionally only slated for large institutions or the very wealthy. The first set of Qualified Opportunity Zone designations were issued in April 2018. Since then, Qualified Opportunity Zones have been designated in all 50 states, the District of Columbia, and 5 U.S. territories.
By investing in a QOF on or before September 9, 2022, the federal and most state governments allow you to defer all capital gains taxes on 2021 K-1-related gains (short or long-term) until December 31, 2026. At the same time, all of your future income and appreciation from that reinvestment of gains could be tax-free if you hold your QOF investment for a period of ten years or more, up to December 31, 2047, when the program is set to expire.
As of September 7, 2022, units of OZ trade at $99.80 just below their initial listing price of $100 per unit. OZ is acquiring stable assets for renovation and building new projects in the Class A multi-family residential apartment sub-sector of commercial real estate.
Investing into a QOF, like Belpointe PREP (NYSE American: “OZ”), allows an investor to defer the tax payment on invested capital gains through tax year-end December 31, 2026. Plus, all income and appreciation from the time one invests into a QOF through December 31, 2047, is potentially tax-free. We spell out how this alternative can work for you in our updated white paper. Follow this link here to request the White Paper.
There are a few very important features about Belpointe PREP that I believe differentiate it from the rest of the competition. While there are multiple QOFs to choose from, most have required minimum investments of $25,000 to $100,000 and as much as $1 million or more. Again, none are publicly listed and traded on a national securities exchange. Most other QOFs are illiquid or require early exit fees. And with Belpointe PREP, there is no risk of future capital calls to cover unexpected project costs, all as spelled out in Belpointe PREP’s prospectus and SEC filings.
In terms of addressable markets, Belpointe PREP (NYSE American: “OZ”) is building and acquiring properties in Nashville, TN, Sarasota, FL and St. Petersburg, FL, and targeting growth markets like Austin, TX, Boise, ID and the Research Triangle, NC, to grow their portfolio of Class-A multi-family properties. These are some of the hottest and hardest to get into markets in the U.S. right now, but when investing with a major developer like Belpointe PREP, investors gain the same access to wholesale pricing for properties that Belpointe PREP has in these markets.
Have questions about how Belpointe PREP (NYSE American: “OZ”) can provide opportunities for investment appreciation and income and help you or your clients to defer or eliminate capital gains tax obligations?
Follow this link here to request the White Paper.
Call or email us and we’ll take the time to answer all of your questions about Belpointe PREP (NYSE American: “OZ”) and how reinvesting capital gains in a QOF can be utilized to offset an investor’s tax obligation.
Remember you only have until Friday, September 9, 2022, to defer all capital gains taxes on 2021 K-1-related gains (short or long-term) until December 31, 2026.
You can contact us at 203-883-1944 or IR@belpointeoz.com
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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