Company: BBU
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001628280-25-017216
Chunk: 380

Company: Brookfield Business Partners L.P.
Filing Date: 2025-04-10
Form: 20-F
Item: Item 10
Chunk 380
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ifying Income Exception in each taxable year. Accordingly, the BBU General Partner believes that our company will be treated as a partnership and not as an association taxable as a corporation for U. S. federal income tax purposes.

  208      Brookfield Business Partners  

If our company fails to meet the Qualifying Income Exception, other than a failure which is determined by the IRS to be inadvertent and which is cured within a reasonable time after discovery, or if our company is required to register under the Investment Company Act, our company will be treated as if it had transferred all of its assets, subject to liabilities, to a newly formed corporation, on the first day of the year in which our company fails to meet the Qualifying Income Exception, in return for stock in such corporation, and then distributed the stock to our unitholders in liquidation. This deemed contribution and liquidation could result in the recognition of gain (but not loss) to U. S. Holders, except that U. S. Holders generally would not recognize the portion of such gain attributable to stock or securities of non-U. S. corporations held by us. If, at the time of such contribution, our company were to have liabilities in excess of the tax basis of its assets, U. S. Holders generally would recognize gain in respect of such excess liabilities upon the deemed transfer. Thereafter, our company would be treated as a corporation for U. S. federal income tax purposes.

If our company were treated as a corporation in any taxable year, either as a result of a failure to meet the Qualifying Income Exception or otherwise, our company’s items of income, gain, loss, deduction or credit would be reflected only on our company’s tax return rather than being passed through to our unitholders, and our company 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, under certain circumstances, our company might be classified as a PFIC for U. S. federal income tax purposes, and a U. S. Holder would be subject to the rules applicable to PFICs discussed below. See “-Consequences to U. S. Holders-Passive Foreign Investment Companies”. Subject to the PFIC rules, distributions made to U. S. Holders would be treated as taxable dividend income to the extent of our company’s current or accumulated earnings and profits. Any distribution in excess of current and accumulated