Company: EGP
Filing Date: 2025-12-05
Form Type: S-3ASR
Source: 0001140361-25-044456
Chunk: 46

Company: EASTGROUP PROPERTIES INC
Filing Date: 2025-12-05
Form: S-3ASR
Chunk 46
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 types of passive income, and the income requirements applicable to us to qualify as a REIT under the Code and the definition of qualifying income under the publicly traded partnership rules are very similar. However, some important differences exist between these two income tests, that may cause certain amounts that qualify as rents from real property under the REIT rules to fail to qualify as such under the publicly traded partnership rules. We intend to operate so that any subsidiary partnerships will satisfy at least one of the above-mentioned safe harbors, and/or comply with the qualifying income exception, so as to avoid being taxed as a corporation under these rules. However, we may not control all of our subsidiary partnerships, and treatment of a subsidiary partnership as a corporation under the publicly traded partnership rules could prevent us from qualifying as a REIT.

As the Operating Partnership is currently disregarded as separate from us for U.S. federal income tax purposes, it is not currently subject to the rules regarding publicly traded partnerships. However, the Operating Partnership will be subject to such rules if and when the Operating Partnership is no longer a disregarded entity for U.S. federal income tax purposes. At such time, the limited partnership agreement of the Operating Partnership and any applicable contribution agreement may allow limited partners to redeem units in the Operating Partnership (subject to various limitations). If any such redemption rights, or other transfers of interests in the Operating Partnership, following termination of its status as a disregarded entity resulted in limited partnership interests of the Operating Partnership to be considered readily tradable on the substantial equivalent of a secondary market, the Operating Partnership would become a publicly traded partnership, absent satisfaction of a safe harbor as noted above. If the Operating Partnership were to become a publicly traded partnership, it would be taxed as a corporation unless it satisfied the qualifying income exception described above

Taxation of Partnerships

Under the Code, a partnership generally is not subject to U.S. federal income tax, but is required to file a partnership tax information return each year. In general, the character of each partner’s share of each item of income, gain, loss, deduction or credit is determined at the partnership level. Each partner is then allocated a share of such items and is required to take such items into account in determining the partner’s income. Each partner includes such amount in income for any taxable year of the partnership ending within or with the taxable year of the partner, without regard to whether the partner has received or will receive any cash distributions from the partnership. Cash distributions, if any, from a partnership to a partner generally are not