Company: SPH
Filing Date: 2025-02-12
Form Type: S-3
Source: 0001193125-25-024546
Chunk: 30

Company: SUBURBAN PROPANE PARTNERS LP
Filing Date: 2025-02-12
Form: S-3
Chunk 30
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 challenge our position with
respect to depreciating or amortizing the Section 743(b) adjustment we take to preserve the uniformity of the common units. If such a challenge were sustained, the gain from the sale of common units might be increased without the benefit of
additional deductions.

Subject to certain limitations, a Section 743(b) adjustment may create additional depreciable basis that is
eligible for bonus depreciation under Section 168(k) to the extent the adjustment is attributable to depreciable property and not to goodwill or real property. However, because we may not be able to determine whether transfers of our common
units satisfy all of the eligibility requirements and due to other limitations regarding administrability, we may elect out of the bonus depreciation provisions of Section 168(k) with respect to basis adjustments under Section 743(b).

A Section 754 election is advantageous if the transferee’s tax basis in his common units is higher than the common units’ share
of the aggregate tax basis of our assets immediately prior to the transfer. Conversely, a Section 754 election is disadvantageous if the transferee’s tax basis in his common units is lower than those common units’ share of the
aggregate tax basis of our assets immediately prior to the transfer. Thus, the fair market value of the common units may be affected either favorably or unfavorably by the election. A basis adjustment is required regardless of whether a
Section 754 election is made in the case of a transfer of an interest in us if we have a substantial built-in loss immediately after the transfer. Generally, a
built-in loss is substantial if (i) it exceeds $250,000 or (ii) the transferee would be allocated a net loss in excess of $250,000 on a hypothetical sale of our assets for their fair market value
immediately after a transfer of the interests at issue. In addition, a basis adjustment is required regardless of whether a Section 754 election is made if we distribute property and have a substantial basis reduction. A substantial basis
reduction exists if, on a liquidating distribution of property to a unitholder, the sum of (i) the amount of loss recognized by the unitholder on the distribution, plus (ii) the excess of the unitholder’s basis in the distributed
property over our basis in that property immediately before the distribution, exceeds $250,000.

18

Tax Treatment of Operations

Accounting Method and Taxable Year

We use
the year ending December 31 as our taxable year