Company: BPYPN
Filing Date: 2025-03-21
Form Type: 20-F
Source: 0001545772-25-000008
Chunk: 188

Company: Brookfield Property Partners L.P.
Filing Date: 2025-03-21
Form: 20-F
Item: Item 10
Chunk 188
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 disposition of Preferred Units or New LP Preferred Units may be treated as UBTI for U. S. federal income tax purposes. Tax-exempt organizations should consult their own tax advisers regarding the consequences of owning and disposing of Preferred Units or New LP Preferred Units.

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Consequences to Non-U. S. Holders of Preferred Units or New LP Preferred Units

The tax treatment of distributions on the Preferred Units and New LP Preferred Units to Non-U. S. Holders is uncertain. The BPY General Partner and New LP General Partner will treat distributions on the Preferred Units and New LP Preferred Units as guaranteed payments for the use of capital made from sources outside the United States for U. S. federal income tax purposes, and the BPY General Partner and New LP General Partner generally do not expect to cause BPY or New LP to withhold U. S. federal income tax on such guaranteed payments made to Non-U. S. Holders, provided that BPY and New LP are not engaged in a trade or business within the United States. Assuming that the distributions qualify as guaranteed payments, Non-U. S. Holders generally are not expected to share in BPY’s or New LP’s items of income, gain, loss, or deduction for U. S. federal income tax purposes. However, the tax treatment of guaranteed payments for source and withholding tax purposes is uncertain, and the IRS may disagree with this treatment. As a result, it is possible that the IRS could assert that Non-U. S. Holders would be subject to U. S. federal income and withholding tax on their share of BPY’s or New LP’s ordinary income from sources within the United States, even if distributions on the Preferred Units and New LP Preferred Units are treated as guaranteed payments.

If, contrary to expectation, distributions on the Preferred Units or New LP Preferred Units are not treated as guaranteed payments, then a Non-U. S. Holder will share in BPY’s or New LP’s items of income, gain, loss, or deduction, even if BPY and New LP are not engaged in a U. S. trade or business and the holder is not otherwise engaged in a U. S. trade or business. As a result, the holder may be subject to a withholding tax of 30% on the gross amount of certain U. S.-source income of BPY or New LP (as applicable) which is not effectively connected with a U. S. trade or business. Income subjected to such a flat tax rate includes income of