Company: BBU
Filing Date: 2025-02-28
Form Type: F-3
Source: 0001104659-25-019207
Chunk: 50

Company: Brookfield Business Partners L.P.
Filing Date: 2025-02-28
Form: F-3
Chunk 50
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.S. federal income tax purposes for any taxable year in which, after applying certain look-through rules, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets during such year produce or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income, and net foreign currency gains.

Based on its current and expected income, assets, and activities, BBUC does not expect to be classified as a PFIC for the current taxable year, nor does it expect to become a PFIC in the foreseeable future. However,

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the determination of whether BBUC is or will be a PFIC must be made annually as of the close of each taxable year. Because PFIC status depends upon the composition of BBUC’s income and assets from time to time, there can be no assurance that BBUC will not be classified as a PFIC for any taxable year, or that the IRS or a court will agree with BBUC’s determination as to its PFIC status.

Subject to certain elections described below, if BBUC were a PFIC for any taxable year during which a U.S. holder held exchangeable shares, then gain recognized by the U.S. holder upon the sale or other taxable disposition of the exchangeable shares (such as gain from a taxable exchange of exchangeable shares for units) generally would be allocated ratably over the U.S. holder’s holding period for the exchangeable shares. The amounts allocated to the taxable year of the sale or other taxable disposition and to any year before BBUC became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed on the tax on such amount. Further, to the extent that any distribution received by a U.S. holder on its exchangeable shares were to exceed 125% of the average of the annual distributions on the exchangeable shares received during the preceding three years or the U.S. holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above. Similar rules would apply with respect to any lower-tier PF