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

Transferor/Transferee AllocationsOur company may allocate items of income, gain, loss, and deduction using a monthly or otherconvention, whereby any such items recognized in a given month by our company are allocated to ourunitholders as of a specified date of such month. As a result, if you transfer your units, you might be allocatedincome, gain, loss, and deduction realized by our company after the date of the transfer. Similarly, if you acquireadditional units, you might be allocated income, gain, loss, and deduction realized by our company prior to yourownership of such units.Although Section 706 of the U.S. Internal Revenue Code generally governs allocations of items ofpartnership income and deductions between transferors and transferees of partnership interests, it is not clear thatour company’s allocation method complies with the requirements. If our company’s convention were notpermitted, the IRS might contend that our company’s taxable income or losses must be reallocated among ourunitholders. If such a contention were sustained, your tax liabilities might be adjusted to your detriment. TheBPY General Partner is authorized to revise our company’s method of allocation between transferors andtransferees (as well as among investors whose interests otherwise vary during a taxable period).U.S. Federal Estate Tax ConsequencesIf our units are included in the gross estate of a U.S. citizen or resident for U.S. federal estate taxpurposes, then a U.S. federal estate tax might be payable in connection with the death of such person. IndividualU.S. Holders should consult an independent tax adviser concerning the potential U.S. federal estate taxconsequences with respect to our units.Certain Reporting RequirementsA U.S. Holder who invests more than $100,000 in our company may be required to file IRS Form 8865reporting the investment with such U.S. Holder’s U.S. federal income tax return for the year that includes thedate of the investment. You may be subject to substantial penalties if you fail to comply with this and otherinformation reporting requirements with respect to an investment in our units. You should consult an independenttax adviser regarding such reporting requirements.U.S. Taxation of Tax-Exempt U.S. Holders of Our UnitsIncome recognized by a U.S. tax-exempt organization is exempt from U.S. federal income tax except tothe extent of the organization’s unrelated business taxable income, or UBTI. UBTI is defined generally as anygross income derived by a tax-exempt organization from an unrelated trade or business that it regularly carrieson, less the deductions directly connected with that trade or business. In addition, income arising from apartnership (or other entity treated as a partnership for U.S. federal income tax purposes) that holds operatingassets or is otherwise engaged in a trade or business generally will constitute UBTI. Notwithstanding theforegoing, UBTI generally does not include any dividend income, interest income, certain other categories ofpassive income, or capital gains realized by a tax-exempt organization, so long as such income is not “debtfinanced”,as discussed below. The BPY General Partner currently believes that our company should not beregarded as engaged in a trade or business, and anticipates that any operating assets held by our company will beheld through entities that are treated as corporations for U.S. federal income tax purposes.The exclusion from UBTI does not apply to income from “debt-financed property”, which is treated asUBTI to the extent of the percentage of such income that the average acquisition indebtedness with respect to theproperty bears to the average tax basis of the property for the taxable year. If an entity treated as a partnership forU.S. federal income tax purposes incurs acquisition indebtedness, a tax-exempt partner in such partnership willbe deemed to have acquisition indebtedness equal to its allocable portion of such acquisition indebtedness. If anysuch indebtedness were used by our company or by the Property Partnership to acquire property, such property170