Company: BPYPN
Filing Date: 2025-03-21
Form Type: 20-F
Source: 0001545772-25-000008
Chunk: 178

Company: Brookfield Property Partners L.P.
Filing Date: 2025-03-21
Form: 20-F
Item: Item 10
Chunk 178
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 and it would be subject to U. S. corporate income tax and potentially branch profits tax with respect to its income, if any, effectively connected with a U. S. trade or business. Moreover, BPY or New LP might be classified as a PFIC for U. S. federal income tax purposes under certain circumstances, and a U. S. Holder that holds Preferred Units or New LP Preferred Units would be subject to the rules applicable to PFICs discussed below. See generally “ - Consequences to U. S. Holders of Preferred Units or New LP Preferred Units - Passive Foreign Investment Company Considerations for U. S. Holders of Preferred Units of BPY." Subject to the PFIC rules, distributions on Preferred Units or New LP Preferred Units made to U. S. Holders would be treated as taxable dividend income to the extent of BPY’s or New LP’s respective current or accumulated earnings and profits. Any distribution in excess of current and accumulated earnings and profits would first be treated as a tax-free return of capital to the extent of a U. S. Holder’s adjusted tax basis in its Preferred Units or New LP Preferred Units. Thereafter, to the extent such distribution were to exceed a U. S. Holder’s adjusted tax basis in its Preferred Units or New LP Preferred Units, the distribution would be treated as gain from the sale or exchange of such units. The amount of a distribution treated as a dividend and received by a non-corporate U. S. Holder could be eligible for reduced rates of taxation, provided certain conditions are met. In addition, dividends, interest and certain other passive income received by BPY or New LP with respect to U. S. investments generally would be subject to U. S. withholding tax at a rate of 30%. Depending on the circumstances, additional adverse U. S. federal income tax consequences could result. Based on the foregoing consequences, the treatment of BPY or New LP as a corporation could result in a substantial reduction of the value of the Preferred Units or New LP Preferred Units. If the Property Partnership were to be treated as a corporation for U. S. federal income tax purposes, consequences similar to those described above would apply.

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The remainder of this summary assumes that BPY, the Property Partnership, and New LP will be treated as partnerships for U. S. federal tax purposes.

Limited Partner Status of Preferred Unitholders and New LP Preferred Unitholders

The tax treatment of the Preferred Units and New LP Preferred Units is uncertain.