Company: BBU
Filing Date: 2025-03-10
Form Type: 424B3
Source: 0001104659-25-022184
Chunk: 42

Company: Brookfield Business Partners L.P.
Filing Date: 2025-03-10
Form: 424B3
Chunk 42
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ively owned by the holder within the meaning of Section 318 of the Code. If a U.S. holder owns (actually or constructively) only an insubstantial percentage of the total equity interests in BBUC and exercises no control over BBUC’s corporate affairs, the holder may be entitled to sale or exchange treatment with respect to the exchange of exchangeable shares if the holder experiences a reduction in its equity interest in BBUC (taking into account any constructively owned equity interests) as a result of the exchange.

If a U.S. holder meets none of the alternative tests of Section 302(b) of the Code, the exchange would be treated as a distribution with respect to exchangeable shares. Subject to the discussion below under the heading “— Passive Foreign Investment Company Considerations ”, the gross amount of a distribution paid to a U.S. holder with respect to exchangeable shares (including amounts withheld to pay Canadian withholding taxes) would be included in the holder’s gross income as a dividend to the extent paid out of BBUC’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of the distribution exceeds BBUC’s current and accumulated earnings and profits, it would be treated first as a tax-free return of a U.S. holder’s tax basis in its exchangeable shares, and to the extent the amount of the distribution exceeds the U.S. holder’s tax basis, the excess would be taxed as capital gain. In the event that the exchange is properly treated as a distribution, the amount of the distribution would be equal to the amount of cash, if any, and the fair market value of the units received. Dividends received by individuals and other non-corporate U.S. holders may be subject to tax at preferential rates applicable to long-term capital gains, provided certain conditions are met.

Because the determination as to whether any of the alternative tests of Section 302(b) of the Code is satisfied with respect to any particular U.S. holder that exchanges exchangeable shares for units will depend upon the facts and circumstances as of the time the determination is made, each U.S. holder should consult its own tax advisor regarding the tax treatment of the exchange, including the calculation of the holder’s tax basis in any remaining exchangeable shares in the event of an exchange that is treated as a distribution.

#### Exercise of the Partnership Call Right.
The partnership has the right to acquire exchangeable shares directly from a holder under certain circumstances in exchange for units or cash (the