Company: BEP
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0001533232-25-000006
Chunk: 452

Company: Brookfield Renewable Partners L.P.
Filing Date: 2025-02-28
Form: 20-F
Item: Item 10
Chunk 452
---
 a transferee of LP units under Section 743(b) of the U. S. Internal Revenue Code to reflect the purchase price paid by the transferee for LP units. This election does not apply to a person who purchases LP units directly from BEP. For purposes of this discussion, a transferee’s inside basis in BEP’s assets will be considered to have two components: (i) the transferee’s share of BEP’s tax basis in BEP’s assets, or common basis, and (ii) the adjustment under Section 743(b) of the U. S. Internal Revenue Code to that basis. The foregoing rules would also apply to BRELP.

Generally, a Section 754 Election would be advantageous to a transferee U. S. Holder if such U. S. Holder’s tax basis in its LP units were higher than such LP units’ share of the aggregate tax basis of BEP’s assets immediately prior to the transfer. In that case, as a result of the Section 754 Election, the transferee U. S. Holder would have a higher tax basis in its share of BEP’s assets for purposes of calculating, among other items, such holder’s share of any gain or loss on a sale of BEP’s assets. Conversely, a Section 754 Election would be disadvantageous to a transferee U. S. Holder if such U. S. Holder’s tax basis in its LP units were lower than such LP units’ share of the aggregate tax basis of BEP’s assets immediately prior to the transfer. Thus, the fair market value of LP units may be affected either favorably or adversely by the election.

Without regard to whether the Section 754 Election is made, if LP units are transferred at a time when BEP has a “substantial built-in loss” in its assets, BEP will be obligated to reduce the tax basis in the portion of such assets attributable to such LP units.

The calculations involved in the Section 754 Election are complex, and the Managing General Partner and the BRELP General Partner advise that each will make such calculations on the basis of assumptions as to the value of BEP assets and other matters. Each U. S. Holder should consult its own tax adviser as to the effects of the Section 754 Election.

Uniformity of LP Units

Because BEP cannot match transferors and transferees of LP units, BEP must maintain the uniformity of the economic and tax characteristics of LP units to a purchaser of LP units. In the absence of uniform