Tax Information

Information for Shareholders of Belpointe REIT, Inc. who participated in the Tender Offer

For Shareholders who participated in the Tender Offer on September 14, 2021, you should have received a 2021 Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, regarding the exchange of your shares in Belpointe REIT, Inc (“REIT, Inc.”) – EIN 83-1314648.

You exchanged your shares in REIT, Inc. for LLC units in Belpointe PREP, LLC (“PREP LLC”) – EIN 84-4412083. This was a taxable exchange under Section 1001 of the Internal Revenue Code.

As a result of the exchange, you should report an inclusion event on September 14, 2021, on 2021 Form 8949, Sales and other Dispositions of Capital Assets, on Part 1 (Short Term Gains) and Part 2 (Long Term Gains), as applicable, reporting on Box (f) Code Y. See Treas. Reg. § 1.1400Z2(b)-1(c). Second, you should additionally report a gain for the difference in your investment in REIT, Inc. and the sale price on the exchange ($100 value for each PREP LLC unit received or, stated in the reverse, $105 in value for each REIT, Inc. share tendered, rounded up to the nearest whole share). Third, you should also report the inclusion event on 2021 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, by reporting the exchange on Part III, Inclusion Events and Certain Other Transfers During the Current Tax Year.

As a result of the exchange, you made a new qualifying investment in PREP, LLC on September 14, 2021, and may elect to defer capital gains realized from March 19, 2021 through September 14, 2021  (including the amount of your inclusion event ). See Treas. Reg. § 1.1400Z2(a)-1(c)(5). If you elect to defer capital gains on your new qualifying investment in PREP, LLC, you should report on 2021 Form 8949 a new deferral election on either Part 1 or Part 2, as applicable,  reporting on Box (f) Code Z. Additionally, you should also report a deferral event on 2021 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, by reporting a deferral for your investment in PREP, LLC on Part II, Current Tax Year Capital Gains Deferred by Investing in QOF.

This summary has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. The transactions described in this summary are complex, and there may be additional tax considerations that impact your individual tax situation. You should not use this summary as a substitute for professional tax advice. We urge you to consult with a qualified tax professional prior to acting on any of the information contained in this summary.

Information for Shareholders of Belpointe REIT, Inc. who did not participate in the Tender Offer

For Shareholders who participated in the Merger transaction on October 12, 2021, and did not participate in the Tender Offer, you should receive a 2021 Form 1099-DIV, Dividends and Distributions, reporting the distribution to you of an interest in the cash and noncash assets of REIT, Inc. on October 1, 2021, and a deemed contribution by you of your interest in those same assets to BREIT, LLC (“BREIT”) – EIN 88-1103073. You will not receive a Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, with respect to the October 12, 2021 merger.

As a result of the liquidating distribution and contribution transactions, you should report an inclusion event on October 1, 2021, on 2021 Form 8949, Sales and other Dispositions of Capital Assets by reporting the inclusion event on Part 1 (Short Term Gain) and Part 2 (Long Term Gain), as applicable, reporting on Box (f) Code Y. See Treas. Reg. § 1.1400Z2(b)-1(c). Second, you should additionally report a gain or loss on October 1, 2021 for the difference in your investment in REIT, Inc. and the sale price on the exchange ($100 value, comprised of $14.62 in cash and $85.38 in noncash assets, for each BREIT Unit received upon conversion of a REIT, Inc. share). Third, you should also report the inclusion event on 2021 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, by reporting the exchange on Part III, Inclusion Events and Certain Other Transfers During the Current Tax Year.

As a result of the conversion, you are deemed to have made a new qualifying investment in BREIT on October 1, 2021 and may elect to defer capital gains realized from April 5, 2021 through October 1, 2021 (including the amount of your inclusion event). See Treas. Reg. § 1.1400Z2(a)-1(c)(5). If you elect to defer capital gains, you should report on 2021 Form 8949 a new deferral election on either Part 1 or Part 2, as applicable, reporting on Box (f) Code Z. Additionally, you should also report a current year deferral event on 2021 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, by reporting a deferral election for your investment in BREIT on Part II, Current Tax Year Capital Gains Deferred by Investing in QOF.

Finally, as a result of the merger on October 12, 2021, your interest in BREIT was exchanged for an interest in PREP, LLC. Your deferral election for your interest in BREIT carries over to your interest in PREP, LLC. See Treas. Reg. § 1.1400Z2(b)-1(c)(6)(ii)(C)(2).  You will receive a 2021 Schedule K-1 (Form 1065), Partner’s Share of Current Year Income, Deductions, Credits, and Other Items, for your ownership in BREIT for the period October 1, 2021 through October 12, 2021.  The 2021 Schedule K-1 (Form 1065) will also report the non-taxable exchange of your interest in BREIT for an interest in PREP, LLC effective October 12, 2021. If you made a deferral election for your new qualifying investment in BREIT, you should report on 2021 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, a change in the QOF  for your deferral election..

This summary has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. The transactions described in this summary are complex, and there may be additional tax considerations that impact your individual tax situation. You should not use this summary as a substitute for professional tax advice. We urge you to consult with a qualified tax professional prior to acting on any of the information contained in this summary.

 

Information for Unitholders who purchased units of Belpointe PREP, LLC during the period October 1, 2021 through December 31, 2021

For Unitholders who acquired units in PREP, LLC (either directly from PREP, LLC or in a brokerage transaction after PREP, LLC began trading on the New York Stock Exchange American on October 18, 2021) during the period October 1, 2021 through December 31, 2021 you should receive a 2021 Schedule K-1 (Form 1065), Partner’s Share of Current Year Income, Deductions, Credits, and Other Items, for your ownership in PREP, LLC – EIN 84-4412083.

As a result of the acquisition of units in PREP, LLC, you made a qualifying investment and you may elect to defer capital gains realized within 180 days prior to the date of your acquisition of PREP, LLC units.  See Treas. Reg. § 1.1400Z2(a)-1(c)(5).

If you elect to defer capital gains on your qualifying investment in PREP, LLC, you should report on 2021 Form 8949 a new deferral election on either Part 1 or Part 2, as applicable, reporting on Box (f) Code Z. Additionally, you should also report a deferral event on 2021 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, by reporting a deferral for your investment in PREP, LLC on Part II, Current Tax Year Capital Gains Deferred by Investing in QOF.

This summary has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. The transactions described in this summary are complex, and there may be additional tax considerations that impact your individual tax situation. You should not use this summary as a substitute for professional tax advice. We urge you to consult with a qualified tax professional prior to acting on any of the information contained in this summary.