Company: HPP
Filing Date: 2025-02-26
Form Type: POS AM
Source: 0001193125-25-035303
Chunk: 102

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-02-26
Form: POS AM
Chunk 102
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. In that case, the tax basis of these property interests generally will carry over to our operating partnership, notwithstanding their different book
(i.e., fair market) value. The partnership agreement requires that income and loss allocations with respect to these properties be made in a manner consistent with Section 704(c) of the Code. Treasury Regulations issued under
Section 704(c) of the Code provide partnerships with a choice of several methods of accounting for book-tax differences. Depending on the method we choose in connection with any particular contribution,
the carryover basis of each of the contributed interests in the properties in the hands of our operating partnership (1) could cause us to be allocated lower amounts of depreciation deductions for tax purposes than would be allocated to us if
any of the contributed properties were to have a tax basis equal to its respective fair market value at the time of the contribution and (2) could cause us to be allocated taxable gain in the event of a sale of such contributed interests or
properties in excess of the economic or book income allocated to us as a result of such sale, with a corresponding benefit to the other partners in our operating partnership. An allocation described in clause (2) above might cause us or the
other partners to recognize taxable income in excess of cash proceeds in the event of a sale or other disposition of property, which might adversely affect our ability to comply with the REIT distribution requirements. See “—Taxation of
Our Company—General—Requirements for Qualification as a REIT” and “—Annual Distribution Requirements.”

Any property
acquired by our operating partnership in a taxable transaction will initially have a tax basis equal to its fair market value, and Section 704(c) of the Code generally will not apply.

Partnership Audit Rules. Under current U.S. federal income tax law, subject to certain exceptions, any audit adjustment to items of income, gain, loss,
deduction, or credit of a partnership (and any partner’s distributive share thereof) generally is determined, and taxes, interest, or penalties attributable thereto are assessed and collected, at the partnership level. It is possible that these
rules could result in partnerships in which we directly or indirectly invest, including our operating partnership, being required to pay additional taxes, interest and

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penalties as a result of an audit adjustment, and we, as a direct or indirect partner of these partnerships, could be required to bear the economic burden of those taxes, interest, and penalties even though we, as a REIT, may not