FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

the Obama administration proposes that the current law governing the treatment of carried interest be changed fortaxable years ending after December 31, 2012, to subject such income to ordinary income tax. The Obamaadministration’s published revenue proposals for previous years contained similar proposals.It remains unclear whether any legislation related to such revenue proposals or similar to the legislationdescribed above will be proposed or enacted by the U.S. Congress and, if enacted, whether such legislationwould affect an investment in our company. You should consult an independent tax adviser as to the potentialeffect of any proposed or future legislation on an investment in our company.The remainder of this discussion is based on current law without regard to the proposed legislation oradministrative proposals discussed above.Consequences to U.S. HoldersSpin-OffA U.S. Holder who receives our units pursuant to the spin-off will be considered to have received ataxable distribution in an amount equal to the fair market value of the gross amount of our units received by suchholder plus the amount of cash received in lieu of fractional units, without reduction for any Canadian taxwithheld in respect of the spin-off. This distribution would be treated as a dividend, taxable as ordinary income,to the extent of your share of current and accumulated earnings and profits of Brookfield Asset Management asdetermined for U.S. federal income tax purposes (which Brookfield Asset Management does not calculate). Ifyou are a non-corporate U.S. Holder, including an individual, the amount of the dividend received by yougenerally would be “qualified dividend income” subject to U.S. tax at preferential rates, provided BrookfieldAsset Management is not a PFIC for the taxable year in which the dividend is distributed or for the precedingtaxable year, you received the dividend in respect of Class A limited voting shares that are readily tradable on anestablished securities market in the United States (such as the NYSE), and the following additional requirementsare met: (i) you do not treat the dividend as “investment income” for purpose of the rules limiting deductions forinvestment interest, (ii) you have held the shares of stock in respect of which such dividend was made for at least61 days during the 121-day period beginning 60 days before the ex-dividend date, and (iii) you satisfy certainat-risk requirements and other rules. Based upon the composition of its income and its assets, Brookfield AssetManagement does not believe that it is a PFIC for the current taxable year or for the preceding taxable year.However, no assurance can be provided that the IRS will agree with such position.If the amount of the distribution were to exceed Brookfield Asset Management’s current and accumulatedearnings and profits, the excess would be treated as a recovery of basis to the extent of your basis in BrookfieldAsset Management shares and then as capital gain. Because Brookfield Asset Management does not calculateearnings and profits for U.S. tax purposes, however, you should expect not to be able to establish that any portionof the distribution would be treated as recovery of basis or capital gain.If you fail to timely provide Brookfield Asset Management with a properly completed IRS Form W-9,you may be subject to “backup” withholding tax on the distribution, unless you come within certain exemptcategories of recipients and, when required, demonstrate that status. Backup withholding is not an additional tax,and any amounts withheld under the “backup” withholding rules will be allowed as a credit against your U.S.federal income tax liability (or as a refund if in excess of such liability), provided the required information istimely furnished to the IRS. You should consult an independent tax adviser regarding the application of theforegoing rules to you.Dividends received by you pursuant to the spin-off generally will be treated as foreign source income forforeign tax credit limitation purposes. Accordingly, any Canadian federal withholding tax assessed on dividendsreceived by you pursuant to the spin-off may, subject to certain limitations, be claimed as a foreign tax creditagainst your U.S. federal income tax liability or may be claimed as a deduction for U.S. federal income tax163