Sunoco 2013 Annual Report Download - page 30

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may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax liability
that result from that income.
Tax gain or loss on disposition of our limited partner units could be more or less than expected.
If our unitholders sell their limited partner units, they will recognize a gain or loss equal to the difference between the
amount realized and their tax basis in those limited partner units. Prior distributions to our unitholders in excess of the total net
taxable income the unitholder was allocated for a unit, which decreased their tax basis in that unit, will, in effect, become
taxable income to our unitholders if the limited partner unit is sold at a price greater than their tax basis in that limited partner
unit, even if the price they receive is less than their original cost. A substantial portion of the amount realized, whether or not
representing gain, may be ordinary income. In addition, if our unitholders sell their units, they may incur a tax liability in
excess of the amount of cash received from the sale.
Tax-exempt entities and non-U.S. persons face unique tax issues from owning our common units that may result in adverse
tax consequences to them.
Investment in common units by tax-exempt entities, such as individual retirement accounts ("IRAs"), and non-
U.S. persons raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt
from federal income tax, including individual retirement accounts and other retirement plans, will be unrelated business taxable
income and will be taxable to them. Distributions to non-U.S. persons will be reduced by withholding taxes at the highest
applicable effective tax rate, and non-U.S. persons will be required to file U.S. federal tax returns and pay tax on their share of
our taxable income.
Our unitholders will likely be subject to state and local taxes and return filing requirements in states where they do not live
as a result of investing in our limited partner units.
In addition to federal income taxes, our unitholders will likely be subject to other taxes, including state and local taxes,
unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which
we do business or own property, even if they do not live in any of those jurisdictions. Our unitholders will likely be required to
file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further,
our unitholders may be subject to penalties for failure to comply with those requirements. We currently conduct our business
and own assets in more than 30 states, most of which impose a personal income tax. As we make acquisitions or expand our
business, we may own assets or conduct business in additional states that impose a personal income tax. It is our unitholders’
responsibility to file all United States federal, state and local tax returns.
The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential
legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.
The present federal income tax treatment of publicly traded partnerships, including us, or an investment in our common
units, may be modified by administrative, legislative or judicial interpretation at any time. Any modification to the federal
income tax laws and interpretations thereof may or may not be applied retroactively. Moreover, any such modification could
make it more difficult or impossible for us to meet the exception which allows publicly traded partnerships that generate
qualifying income to be treated as partnerships (rather than corporations) for U.S. federal income tax purposes, affect or cause
us to change our business activities, or affect the tax consequences of an investment in our common units. For example,
members of Congress have been considering substantive changes to the definition of qualifying income and the treatment of
certain types of income earned from partnerships. While these specific proposals would not appear to affect our treatment as a
partnership, we are unable to predict whether any of these changes, or other proposals, will ultimately be enacted. Any such
changes could negatively impact the value of an investment in our common units.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
See Item 1. (c) for a description of the locations and general character of our material properties.