Invest In The Prospect of Stable Comfort by Investing In Opportunity Zone Funds
Every week I field calls about how is it that one can still shelter 2021 capital gains in the middle of March 2022? That’s a topic I gladly chat about given all the craziness in the world of investments today. The rules of Opportunity Zone Fund investing involve a 180-day lookback period to insulate capital gains. For those investors filing on April 18, 2022, one can go back to October 21, 2021 and defer taxes on all capital gains realized through year-end and for up to the next five years until December 31, 2026.
For pass-through entities, the time to defer is extended even further out, but, by all means, call your tax professional to walk you through what this tax treatment can mean and do for your 2021 capital gain tax obligation. For most investors, it may defer or even eliminate a huge tax bill and provide an opportunity for growth and income on capital gains tax dollars that would have otherwise gone to the IRS. Opportunity Zone investing is a once-in-a-generation investment and should be seriously considered as a focus tax shelter.
Adding to the investment proposition is the notion of persistent inflation, something the Fed is not doing a good job of containing. This past week, Fed Chair Jerome Powell stated that despite more than anticipated inflation, the economy would still “flourish,” the market rallied strongly. This was a classic relief rally into a larger bearish downtrend.
Unless Vladimir Putin gets taken out by his inner circle and democracy suddenly “flourishes” all around Russia, this rally too, in my opinion, may fade as inflation approaches an annual rate of double digits. Oil and commodity prices are spiking through the February highs like a hot knife through butter and Fed Chair Powell broached the idea of a 50 basis-point rate hike at the next FOMC meeting on Monday. Man, this guy is late to the crime scene.
Crude oil jumped to over $110/bbl and all manner of commodities spiked higher as Vladimir Putin pushed his chips further into the center of the geopolitical poker table. China told President Biden we’re taking notes and Saudi Arabia isn’t taking his calls. At the same time, Russian forces have taken a heavy toll, which presses the question of how long this war will last and at what price the global economy will be impacted.
I think sometimes it just pays to keep risk appetite in sectors that have historically shown reliable inflation-adjusted income streams—namely Class-A multi-family residential real estate in some of the most prominent labor markets within the borders of the U.S.
At Belpointe PREP, LLC (NYSE American: OZ) we are developing and acquiring such properties in Nashville, TN, Sarasota-Tampa St. Petersburg, FL, Boise, ID, Austin, TX and the Research Triangle, NC for future income potential and growth opportunities for our investors. I invite you to dig into the many details and tax benefits of our program by visiting our website at https://belpointeoz.com/why-oz/
From my perspective and that of the executive team that oversees Belpointe PREP (NYSE American: OZ), leasing multi-family residential properties in strong job markets where annual inflation is running above 7% and rents are tied to CPI or other inflation benchmarks is a very compelling investment proposition as a possible inflation hedge.
At Belpointe PREP, our focus is on identifying, acquiring, developing or redeveloping and managing commercial real estate located within qualified opportunity zones as well as, acquiring and building out new multi-family projects to meet the demand from what we believe is a tight supply of availability.
What I believe is working is the world outside of government intervention, where money goes where it is best served. In this case, I believe that right now there are few asset classes that are as attractive as brick-and-mortar income-producing multi-family residential real estate. Inflation is a formidable headwind for the stock market, but a strong tailwind for Class-A rental properties.
And what about taxes on 2021 & 2022 short-and-long term capital gains? They will still need to be paid. Possibly further reducing your investment portfolio.
The first filing date for personal taxes is April 18, just a month 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.
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? I think one compelling option is to consider channeling 2021 capital gains into a Qualified Opportunity Zone Fund (QOF) where there are tax benefits and the potential for income and inflation-friendly growth.
Cody H. Laidlaw
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 sec.gov or belpointeoz.com. Alternatively, you may request Belpointe PREP send you the prospectus by calling (203) 883-1944 or emailing firstname.lastname@example.org. Read the prospectus in its entirety before making an investment decision.
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