Fortress Transportation and Infrastructure LLC Notice to Investors Regarding 2018 Schedule K-1s
August 29 2019 - 4:15PM
The purpose of this notice is to update the holders of shares of
Fortress Transportation and Infrastructure Investors LLC (“FTAI”)
on the tax compliance developments detailed in IRS Notice 2019-46
(the “Notice”), which was published on August 22, 2019.
Under the Tax Cut and Jobs Act of 2017, a number
of changes were made to the taxation of non-U.S. income, including
the introduction of the “global low-taxed intangible income,” or
GILTI, regime. Under preexisting tax regulations, a
U.S. partnership that held a 10% or greater interest in the vote or
value of a “controlled foreign corporation,” or CFC, was generally
required to include in income its pro rata share of the net income
of that non-U.S. corporation and allocate that income to its
partners. These rules were incorporated into the new
GILTI regime and your Schedule K-1 from FTAI for tax year 2018 was
prepared on that basis.
In June 2019, the IRS modified these preexisting
tax regulations (including with respect to the GILTI regime) such
that the 10% ownership test is applied at the partner level rather
than the partnership level (i.e., the income inclusion described
above now only applies to U.S. partners that own 10% or more of the
vote or value of the stock of a CFC). For this purpose, a
partner’s ownership of stock of a CFC includes his or her
proportionate share of the stock owned by the partnership in
addition to stock of the CFC otherwise considered owned under these
rules by such partner without regard to the partnership.
In response to taxpayer comments highlighting
administrative difficulties, the IRS issued the Notice, which
permits FTAI to file a 2018 U.S. tax return and Schedule K-1s
consistent with the preexisting tax regulations.
Significantly, the Notice provides that a partnership that meets
the notification and reporting requirements of the Notice will not
be subject to certain penalties to the extent such failures arise
from acting prior to June 22, 2019 in a manner consistent with the
preexisting regulations.
In order to qualify for this relief, FTAI is
required to notify its investors of the following:
- FTAI prepared your 2018 Schedule K-1 based on the preexisting
tax regulations (i.e., proposed Treas. Reg. section 1.951A-5) and
does not intend to amend such Schedule K-1.
- FTAI prepared its 2018 U.S. tax return (IRS Form 1065) based on
the preexisting tax regulations (i.e., proposed Treas. Reg. section
1.951A-5).
- This notification is provided to you in accordance with IRS
Notice 2019-46.
FTAI cannot, and does not, provide tax advice on
tax matters to its investors. This notice was prepared for
informational purposes only, and is not intended to provide, and
should not be relied on for tax advice. Accordingly, you are urged
to consult your own tax advisor regarding the matters discussed
herein.
About Fortress Transportation and
Infrastructure Investors LLC
Fortress Transportation and Infrastructure
Investors LLC owns and acquires high quality infrastructure and
equipment that is essential for the transportation of goods and
people globally. FTAI targets assets that, on a combined basis,
generate strong and stable cash flows with the potential for
earnings growth and asset appreciation. FTAI is externally managed
by an affiliate of Fortress Investment Group LLC, a leading,
diversified global investment firm.
For further information, please
contact:
Alan AndreiniInvestor RelationsFortress
Transportation and Infrastructure Investors LLC(212)
798-6128aandreini@fortress.com
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