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

purposes. Notwithstanding the foregoing, the rules relating to foreign tax credits are complex, and the availabilityof a foreign tax credit depends on numerous factors. You should consult an independent tax adviser concerningthe application of the U.S. foreign tax credit rules to you.Holding of Our UnitsIncome and Loss. If you are a U.S. Holder, you will be required to take into account, as described below,your allocable share of our company’s items of income, gain, loss, deduction, and credit for each of ourcompany’s taxable years ending with or within your taxable year. Each item generally will have the samecharacter and source as though you had realized the item directly. You must report such items without regard towhether any distribution has been or will be received from our company. Our company intends to make cashdistributions to all unitholders on a quarterly basis in amounts generally expected to be sufficient to permit U.S.Holders to fund their estimated U.S. tax obligations (including U.S. federal, state, and local income taxes) withrespect to their allocable shares of our company’s net income or gain. However, based upon your particular taxsituation and simplifying assumptions that our company will make in determining the amount of suchdistributions, and depending upon whether you elect to reinvest such distributions pursuant to the distributionreinvestment plan, if available, your tax liability might exceed cash distributions made to you, in which case anytax liabilities arising from your ownership of our units would need to be satisfied from your own funds.With respect to U.S. Holders who are individuals, certain dividends paid by a corporation (includingcertain qualified foreign corporations) to our company and that are allocable to such U.S. Holders prior toJanuary 1, 2013 may qualify for reduced rates of taxation. A qualified foreign corporation includes a foreigncorporation that is eligible for the benefits of specified income tax treaties with the United States. In addition, aforeign corporation is treated as a qualified corporation with respect to its shares that are readily tradable on anestablished securities market in the United States. Among other exceptions, U.S. Holders who are individualswill not be eligible for reduced rates of taxation on any dividends if the payer is a PFIC for the taxable year inwhich such dividends are paid or for the preceding taxable year. U.S. Holders that are corporations may beentitled to a “dividends received deduction” in respect of dividends paid by U.S. corporations in which ourcompany (through the Property Partnership) owns stock. You should consult an independent tax adviserregarding the application of the foregoing rules in light of your particular circumstances.For U.S. federal income tax purposes, your allocable share of our company’s items of income, gain, loss,deduction, or credit will be governed by our limited partnership agreement if such allocations have “substantialeconomic effect” or are determined to be in accordance with your interest in our company. Similarly, ourcompany’s allocable share of items of income, gain, loss, deduction, or credit of the Property Partnership will begoverned by the limited partnership agreement of the Property Partnership if such allocations have “substantialeconomic effect” or are determined to be in accordance with our company’s interest in the Property Partnership.The BPY General Partner and the Property General Partner believe that, for U.S. federal income tax purposes,such allocations should be given effect, and the BPY General Partner and the Property General Partner intend toprepare tax returns based on such allocations. If the IRS were to successfully challenge the allocations madepursuant to either our company’s limited partnership agreement or the limited partnership agreement of theProperty Partnership, then the resulting allocations for U.S. federal income tax purposes might be less favorablethan the allocations set forth in such agreements.Basis. You will have an initial tax basis in your units equal to their fair market value on the date youreceive them pursuant to the spin-off, increased by your share of our company’s liabilities, if any. That basis willbe increased by your share of our company’s income and by increases in your share of our company’s liabilities,if any. That basis will be decreased, but not below zero, by distributions you receive from our company, by yourshare of our company’s losses, and by any decrease in your share of our company’s liabilities. Under applicableU.S. federal income tax rules, a partner in a partnership has a single, or “unitary”, tax basis in his or herpartnership interest, unlike a shareholder of a corporation. As a result, any amount you pay to acquire additionalunits (including through the distribution reinvestment plan, if available) will be averaged with the adjusted tax164