Belpointe PREP (OZ) Investor presentation summary

Opportunity zone program evolution and structure

• Opportunity Zones were created in 2017 and expanded by the 2025 Act, evolving into OZ 2.0 with refreshed eligibility, periodic re-designation, and enhanced rural benefits starting January 1, 2027.

• Both OZ 1.0 and OZ 2.0 aim to drive long-term investment and revitalization in designated communities, targeting high-growth real estate markets.

• OZ 2.0 modernizes the framework while preserving the core objective of channeling private capital to underserved areas.

Tax benefits and investment mechanics

• Eligible capital gains reinvested in Qualified Opportunity Funds (QOFs) can be deferred, with OZ 1.0 offering deferral until 12/31/2026 and OZ 2.0 providing a rolling 5-year deferral.

• Basis step-ups are available: 10–15% under OZ 1.0, 10% for all zones and up to 30% for rural zones under OZ 2.0, subject to holding periods.

• After a 10-year hold, appreciation on QOF investments may be exempt from federal capital gains tax under both programs.

• Investors must reinvest eligible gains within 180 days of recognition to qualify for OZ benefits.

Eligible assets and portfolio strategy

• Capital gains from a wide range of assets—including stocks, bonds, real estate, and collectibles—can be reinvested for OZ benefits.

• Only the capital gain portion qualifies for OZ tax incentives; non-gain dollars do not receive OZ benefits.

• Opportunity Zones offer significant long-term tax-free growth potential, making them attractive for both individual and institutional investors.