Individual investors - Tax implications for individual investors depend on the vehicle in which AllianceBernstein Holding Units are held (see Tax-exempt/tax-advantaged vehicles below).
Institutional investors - The tax implications for institutions will be governed by each institution’s tax status.
Mutual funds, or Regulated Investment Companies under the American Jobs Creation Act of 2004, may derive qualifying income for purposes of the 90% gross income test from AllianceBernstein Holding. A Mutual Fund can generally have no more than 25% of its assets in publicly traded partnerships, and can own no more than 10% of any one publicly traded partnership.
Tax-exempt/tax-advantaged vehicles such as IRAs, pension and profit sharing plans, foundations, endowments and certain trusts may not find an investment in AllianceBernstein Holding Units appropriate. Partnership Operating income is generally treated as unrelated business taxable income (UBTI) subject to taxation. Nevertheless, some pension funds, foundations and endowments have invested in publicly traded partnerships such as AllianceBernstein Holding.
Non-U.S. investors generally must file a U.S. tax return reporting income from AllianceBernstein Holding, and will be taxed at regular U.S. graduated rates. Tax laws require that an estimate of this tax be withheld at the highest individual tax rate (for individuals presently 35%) as prepayment of the taxes. Tax laws in the investor’s home country may allow a foreign tax credit for the U.S. taxes paid on this income.