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Top Tax Benefits Expire New Year’s Eve

Time Is Running Out To Preserve A Double Dose Of Tax Breaks

Stocks appear to be making a year-end run, historically called the Santa Claus rally that culminates the last five trading sessions between Christmas and New Year’s. Trading volume is generally 30% lower than normal volume in a Santa Claus rally, so buyers can move stocks sharply higher for lack of larger sellers. It’s a classic time to sell into strength and possibly book profits.

Bear in mind, this week’s rally is very top-heavy with mega caps in the tech sector seeming to be doing most of the heavy lifting. There is some broad participation, but not to where it can move the needle. In any case the S&P finally hit 4,800 and may be considered overbought by most technical indicators that the chartists follow.

The Fed has turned hawkish and there are few catalysts that can offset the power of tighter fiscal policy.

Investors who already have realized capital gains for 2021, can reinvest those gains for 2021 into a Qualified Opportunity Zone Fund (QOF) by December 31. For at least two good reasons:

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. With that understanding, investors that reinvest their capital gains by December 31, 2021, and hold until 2026, will 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 go-forward cost basis of $110,000, thereby reducing the amount of capital gains tax due when the position is held for 5 years before sold or when taxes are due at the end of 2026. This 10% step-up basis feature declines to 0% on January 1, 2022.

Here is a strategy that I think may make sense for some investors to put into action by the closing bell this Friday. For those investors that have capital gains from various asset classes, or from the sale of a business Belpointe PREP (NYSE American: OZ) units may offset those gains realized in 2021. Since Belpointe PREP is a publicly traded stock investors can control when to buy and sell their units. That’s the beauty of OZ. It’s the only listed QOF where this feature works.

With the Fed in full tightening motion, allocating investment capital into multi-family residential properties in hot job markets at a time when demand for high-quality rental units is strong, seems to me like a compelling investment proposition for 2022.

I believe these two expiring benefits and those summarized below are suited well for investors sitting on capital gains from the sale of stocks, bonds, real estate, a business, collectibles, cryptocurrencies, trademarks, patents, precious metals, planes, boats, livestock, or any other intangible or tangible assets.

Reinvesting those realized gains by December 31 into OZ shares can help shelter 100% of those gains for the next five years and establish a 10% step-up basis in the process. But investors have to act by Friday’s closing bell on the NYSE to qualify for 100% of all the available benefits.

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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