Sunoco 2014 Annual Report Download - page 34

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32
We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between us
and our public Unitholders. The IRS may challenge this treatment, which could adversely affect the value of our common
units.
When we issue additional units or engage in certain other transactions, we determine the fair market value of our assets
and allocate any unrealized gain or loss attributable to such assets to the capital accounts of our Unitholders and our General
Partner. Although we may from time to time consult with professional appraisers regarding valuation matters, including the
valuation of our assets, we make many of the fair market value estimates of our assets ourselves using a methodology based
on the market value of our common units as a means to measure the fair market value of our assets. Our methodology may be
viewed as understating the value of our assets. In that case, there may be a shift of income, gain, loss and deduction between
certain Unitholders and our General Partner, which may be unfavorable to such Unitholders. Moreover, under our current
valuation methods, subsequent purchasers of our common units may have a greater portion of their Internal Revenue Code
Section 743(b) adjustment allocated to our tangible assets and a lesser portion allocated to our intangible assets. The IRS may
challenge our valuation methods, or our allocation of Section 743(b) adjustment attributable to our tangible and intangible
assets, and allocations of income, gain, loss and deduction between our General Partner and certain of our Unitholders.
A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income or loss
being allocated to our Unitholders. It also could affect the amount of gain on the sale of common units by our Unitholders and
could have a negative impact on the value of our common units or result in audit adjustments to the tax returns of our
Unitholders without the benefit of additional deductions.
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.