Skip to main content

Tax Returns Are Due April 18th, A Few Days Left To Shelter 2021 Capital Gains

Rotating Out Of Bonds And Into Rental Properties

This past week, it became increasingly evident in my view that de-risking assets in foreign markets is gaining momentum while accumulating domestic brick and mortar real estate assets is a more favored option.

Real estate is one of the 11 sectors that make up the broader stock market, and the Real Estate Select Sector SPDR Fund (NYSEARCA: XLRE) is one of the largest ETFs in the real estate sector. Against a backdrop of higher inflation, rising interest rates, soaring commodity prices and elevated market volatility, real estate appears to be rapidly gaining popularity as an asset class that may help hedge inflation in addition to offering the potential of generating tax-favored growth and income.

I believe that the market landscape for stocks and bonds is getting crystal clear. The Fed is nowhere close to where it needs to be to harness inflationary pressure. In fact, I don’t think it should be a surprise to anyone that some of the March inflation data is a foregone conclusion. Based on the price increases, both empirical and anecdotal, the CPI probably jumped 1.0% month-over-month from February, which implies a double-digit inflation rate on an annual basis.


Hence, the demand for inflation-sensitive real estate where tenant revenue is indexed to some inflation benchmark. The other prerequisite for most investors is that the underlying real estate assets be located inside U.S. borders. Again, I think it’s getting very clear what “the market” wants to embrace, and that profile is upscale apartments, essential for living purposes, in job markets teeming with help wanted signs for employees earning over $75K per year. In my opinion, that seems to be the sweet spot.

I think investors want some level of certainty within the very uncertain set of highly fluid economic circumstances in play. This week, Fed Governor Lael Brainard (voting FOMC member and staunch fiscal dove) in a speech, said the Fed will be more aggressive to fight inflation. She noted a more rapid pace of rate hikes and the selling of bonds to reduce the Fed’s balance sheet, also known as quantitative tightening (QT), the opposite of quantitative easing (QE).

With much of the economy in flux as to how much inflation is going to impact various industries and business models, one area that I think may be well insulated is income-producing multi-family residential real estate, where rents indexed to CPI or short-term interest rates 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 (FFO).

Belpointe PREP, LLC (NYSE American: OZ) is the first and only publicly listed qualified opportunity fund (QOF) and it requires no paperwork or other documentation to invest, providing investors with the ability to pair off eligible 2021 year-end gains as well as the opportunity for growth and income for the next five years—out to December 31, 2026—where all capital appreciation on OZ stock and the majority of any pass-through income may be tax-free.

It can be a very timely capital gains tax deferment strategy for those that may have just received the unwelcome phone call from their CPA that they are facing some sizable 2021 capital gains taxes. Time is running out though. By the time this blog hits everyone’s inbox, there will be only ten days until the April 18 tax filing deadline.

Owning assets where inflation is a tailwind and not a headwind can narrow the choices of investment options real fast. 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.

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 slice of society that is generating appreciable income, we believe they want well-located, full-featured, safe and impressive housing that offers mobility in the event of a change in jobs. That is a highly addressable market that Belpointe PREP has targeted.

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 eligible 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
Belpointe OZ
255 Glenville Road
Greenwich, CT 06831
T: (203) 883-1944

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 or Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing 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.

©2022 Belpointe PREP, LLC. All rights reserved.

As seen on