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Income Tax Information

General Tax Information

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular unitholder (Unitholder) of American Hotel Income Properties REIT LP ("AHIP"), and no representation with respect to the Canadian or U.S. tax consequences to any particular Unitholder is made. Therefore, Unitholders of AHIP units are encouraged to consult their own tax advisors for advice with respect to their particular circumstances.

Unitholders should also review AHIP's public disclosures in their entirety as published on the SEDAR website at sedar.com


Overview

AHIP is a Canadian-based limited partnership that is publicly traded and is treated as a partnership for Canadian and U.S. tax purposes. As such, AHIP is a “flow through” entity for Canadian and U.S. tax purposes and is not generally subject to income tax. Income of AHIP is allocated to and is subject to tax in the hands of its Unitholders.

AHIP does not earn active business income. Instead, AHIP receives investment income, such as dividends, interest, and return of capital from a subsidiary corporation that indirectly carries on business in the United States. Income for Canadian and U.S. tax purposes is likely to be different due to the difference in currencies used to compute income and tax legislation of the two countries. Taxable income may be less than the distribution for a particular period due to returns of capital paid by AHIP in that period. The computation of AHIP’s Canadian and U.S. taxable income allocated to the Unitholders for a particular taxation year is independent of (i) the annual accounting net income of AHIP; (ii) the annual cash flow generated by AHIP and (iii) the annual distributions.

Tax Information for:

Canadian Unitholders

U.S. Unitholders

Annual Tax Reporting For Unitholders

After the end of AHIP’s taxation year (December 31), the Canadian and U.S. taxable income of AHIP is determined and allocated to all Unitholders, who in turn are required to report such income on their respective tax returns. The allocation of U.S. taxable income to a U.S. resident Unitholder is communicated using Schedules K-1 and K-3 (not a Form 1099).

The allocation of Canadian taxable income is communicated using Form T5013 (not a Form T5).

U.S. Withholding Tax under Section 1446(f) of United States Internal Revenue Code (IRC)

We do not expect non-U.S. investors to be subject to U.S. withholding tax under IRC Section 1446(f). AHIP has not been and does not expect to be engaged in a trade or business within the United States in accordance with Treas. Reg. Sec. 1.1446(f)-4(b)(3). AHIP intends to continue to issue and publish Qualified Notices under Treas. Reg. Sec. 1.1446(f)-4(b)(3)(iii) as applicable. Below are the links to the Qualified Notices:

Computation Of Tax Cost (adjusted Cost Basis)

For Canadian and U.S. resident Unitholders, in general, a Unitholder’s tax cost of his/her AHIP units should equal the sum of (i) the amount paid to acquire the units and (ii) the net taxable income allocated to the Unitholder, less the sum of (iii) the cash distributions received and (iv) taxable loss (in any). Unitholders are obligated to accurately compute the tax basis of their AHIP Units.

For U.S. resident Unitholders, information provided with Schedule K-1 should assist with (ii) to (iv) above.

In addition, for U.S. tax reporting purposes, issuers of corporate stock must report corporate actions that affect stock basis, including but not limited to distributions in excess of corporate ordinary dividends, stock splits, stock dividends, mergers, and recapitalizations. The Internal Revenue Service issued Form 8937 for reporting such corporate actions.

The following files are the Forms 8937 for the 2014 through 2024 tax years and are intended to meet the requirements of public disclosure pursuant to Internal Revenue Code section 6045B for American Hotel Income Properties REIT Inc., AHIP’s U.S. subsidiary:

Form 8937 from prior years: