12.07.2015 Views

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

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

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

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Moreover, if we were to participate in a reportable transaction with a significant purpose to avoid orevade tax, or in any listed transaction, you might be subject to (i) significant accuracy related penalties with abroad scope, (ii) for those persons otherwise entitled to deduct interest on federal tax deficiencies,non-deductibility of interest on any resulting tax liability, and (iii) in the case of a listed transaction, an extendedstatute of limitations. We do not intend to participate in any reportable transaction with a significant purpose toavoid or evade tax, nor do we intend to participate in any listed transactions. However, no assurance can beprovided that the IRS will not assert that we have participated in such a transaction.You should consult an independent tax adviser concerning any possible disclosure obligation under theregulations governing tax shelters with respect to the disposition of our units.Taxable YearOur company currently intends to use the calendar year as its taxable year for U.S. federal income taxpurposes. Under certain circumstances which we currently believe are unlikely to apply, a taxable year other thanthe calendar year may be required for such purposes.Constructive TerminationSubject to the electing large partnership rules described below, our company will be considered to havebeen terminated for U.S. federal income tax purposes if there is a sale or exchange of 50% or more of our unitswithin a 12-month period.A constructive termination of our company would result in the close of its taxable year for all unitholders.If a unitholder reports on a taxable year other than a fiscal year ending on our company’s year-end, and theunitholder is otherwise subject to U.S. federal income tax, the closing of our company’s taxable year may resultin more than 12 months of our company’s taxable income or loss being includable in such unitholder’s taxableincome for the year of the termination. We would be required to make new tax elections after a termination,including a new Section 754 Election. A constructive termination could also result in penalties and other adversetax consequences if we were unable to determine that the termination had occurred. Moreover, a constructivetermination might either accelerate the application of, or subject our company to, any tax legislation enactedbefore the termination.Elective Procedures for Large <strong>Partners</strong>hipsThe U.S. Internal Revenue Code allows large partnerships to elect streamlined procedures for income taxreporting. This election would reduce the number of items that must be separately stated on the IRS SchedulesK-1 that are issued to our unitholders, and such IRS Schedules K-1 would have to be provided to holders on orbefore the first March 15 following the close of each taxable year. In addition, this election would prevent ourcompany from suffering a “technical termination” (which would close our company’s taxable year and requirethat we make a new Section 754 Election) if, within a 12-month period, there were a sale or exchange of 50% ormore of our total units. Despite the foregoing benefits, there are also costs and administrative burdens associatedwith such an election. Consequently, as of this time, our company has not elected to be subject to the reportingprocedures applicable to large partnerships.Withholding and Backup WithholdingFor each calendar year, we will report to you and to the IRS the amount of distributions that we pay, andthe amount of tax (if any) that we withhold on these distributions. The proper application to our company of therules for withholding under Sections 1441 through 1446 of the U.S. Internal Revenue Code (applicable to certaindividends, interest, and amounts treated as effectively connected with a U.S. trade or business, among otheritems) is unclear. Because the documentation we receive may not properly reflect the identities of unitholders at174

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