Tax Information

• Higher quarterly cash distributions due to lower federal and state taxes for AllianceBernstein Holding
• Deferral of portion of taxable income on each unitholder's pro rata share of partnership income as a result of amortization deductions
• Time value of tax deferral
  

AllianceBernstein Holding (NYSE: AB) is a publicly traded limited partnership, and it does not pay the typical 21% federal corporate income tax rate on its profits. Instead, AllianceBernstein Holding pays a 3.5% federal tax on certain gross business revenues.

Because AllianceBernstein Holding is a partnership, it pays lower federal and state taxes compared with corporations. AllianceBernstein Holding’s tax savings permit greater quarterly cash distributions to unitholders.

Investors who purchase units receive additional tax deductions that defer a portion of the federal income taxes they would normally pay on their pro rata share of the partnership’s taxable income. These deductions result from a portion of the purchase price being allocated to tax-deductible goodwill. The deductions, however, reduce the unitholder’s tax basis and thus can result in higher taxes when the units are sold.

Unitholders are not taxed on their quarterly cash distributions, but rather on their pro rata share of the partnership’s taxable income. Unitholders are required to report their pro rata share of the partnership’s taxable income on their tax return. AllianceBernstein Holdings provides this information to each unitholder annually on a Schedule K-1. Schedule K-1s are mailed no later than the first week of March following the close of the partnership’s year-end. Schedule K-1s are also available on the AB Tax Support website at www.taxpackagesupport.com/ab.

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-US investors generally must file a US tax return reporting income from AllianceBernstein Holding, and will be taxed at regular US graduated rates. Tax laws require that an estimate of this tax be withheld at the highest individual tax rate (for individuals, presently 37%) as prepayment of the taxes. Tax laws in the investor’s home country may allow a foreign tax credit for the US taxes paid on this income.

AllianceBernstein Holding has made an Internal Revenue Code Section 754 election, which allows the partnership to pass through to unitholders the tax benefit of amortization deductions that reduce taxable income. The amortization amount is calculated by the AllianceBernstein Tax Department and is generally attributable to goodwill. It is based on the investor’s purchase price of the units, partnership tax basis and other factors. This amortization deduction is included in the amount reported on Schedule K-1, Part III, line 1—Ordinary business income (and disclosed separately on line 20 as the Section 743(b) adjustment). Certain items, including this goodwill, are amortized over 15 years and applicable to unitholders who purchased units after 1997 or obtained their units through inheritance.

For each year the units are owned, the unitholder’s tax basis is reduced by the amount of that year’s amortization. In the year the units are sold, the unitholder must recapture the amortization (i.e., the deduction and reduction of basis in each year owned) as ordinary income. Capital gains tax may apply to any remaining gain. A unitholder may have to recognize an amount of ordinary income even if the unitholder has an overall capital loss on the sale of the units.

Many states have different requirements for limited partners in an investment partnership such as AllianceBernstein Holding. Please see the “State Information and Schedule” section of Schedule K-1 for additional information, and consult a tax advisor regarding specific filing requirements.

Schedule K-1s are sent to every investor who holds units for any portion of time during the previous year.

Units involved in any of these types of transactions are subject to special valuation rules. Contact the broker through which the original purchase was made for information about how to handle the transfer correctly. If the units are held in certificate form, contact AllianceBernstein Holding’s transfer agent, Computershare, to handle the transfer correctly. Additionally, you should contact a tax advisor.

A significant portion of income reported by AllianceBernstein Holding is considered UBTI, which will have certain tax consequences if the units are held by a tax-exempt entity, including an IRA, pension plan or profit-sharing plan. You should consult your tax advisor if you own AllianceBernstein Holding units in these types of entities.

No.

+    Initial purchase price

+    Pro rata share of partnership taxable income

 -    Pro rata share of partnership deductions/losses

 -    Pro rata share of partnership nondeductible expenses

 -    Cash distributions

=    Adjusted tax basis

These adjustments to your original tax basis are maintained by the AB Tax Department. The cumulative tax basis adjustment will be provided to you by the AB Tax Department in the year that the units are sold.

The partnership’s taxable income is based on the reported book income, adjusted for various differences mandated by the tax law. In addition, the partnership’s taxable income reported by its unitholders is reduced by the goodwill amortization discussed in the section above titled "Tax Fact Sheet."

In the case of AllianceBernstein Holding, the capital account is an estimate of your tax basis in your AllianceBernstein Holding units using certain amounts obtained from third parties and adjusted for your pro rata share of partnership items. You should verify your original tax basis from your records or with your broker in the year you sell your units. As noted in the question “How is the tax basis calculated?,” AB will provide cumulative tax basis adjustments.

The Ownership Schedule provides the details of your ownership history of AllianceBernstein Holding units. You should verify the correct number of units on the Ownership Schedule. Any corrections to the Ownership Schedule can be made directly through the AB Tax website.

The amount on line 19 of Schedule K-1 should equal the total cash distributions received for the year. Amounts reported on Schedule K-1 will not be accurate unless the number of units owned shown on the Ownership Schedule is correct.

The Schedule K-1 reports each unitholder’s pro rata share of AllianceBernstein Holding’s taxable income. This income is generally taxable at each individual’s ordinary federal income tax rate and should be reported on the unitholder's individual tax return. (The Tax Fact Sheet provides more information.) As a partnership, AllianceBernstein Holding does not pay out dividends, but instead pays a quarterly cash distribution. The cash distribution is not considered to be taxable income or dividend income for the unitholder, but rather a return of capital. AllianceBernstein Holding’s cash distribution is not categorized by federal tax laws as dividend income, which is what a Form 1099 reports.

The cash distributions received from AllianceBernstein Holding should not be reported anywhere on the individual’s tax return.

Form 1099, in contrast, provides dividend and other income that is typically reported on an individual’s tax return.

AB’s Tax Department strives to mail the Schedule K-1s the first week of March, but it relies on reporting from brokers and financial institutions, which may cause a delay in reporting to unitholders.

The date required for mailing a Form 1099 is January 31, but the IRS does not have a similar requirement for Schedule K-1s.

AB’s Tax Department strives to mail the Schedule K-1s the first week of March so that unitholders may file their individual returns in a timely manner.

Unitholders can typically obtain their Schedule K-1s for the taxable year by visiting the AB Tax Support website at www.taxpackagesupport.com/ab.

Federal tax law requires that a Schedule K-1 be sent to every unitholder. If the Schedule K-1 reports that the account is for an IRA, the amounts are not reportable on your individual income tax return.

However, you may have other tax consequences. Please consult a tax advisor for assistance with respect to these tax consequences.

No. AB is a partnership for tax purposes. As an investor in the partnership, you are a partner. Partnership cash distributions are not considered in determining the partner's distributive share of partnership income or loss. However, please note that cash distributions should be monitored at your end for purposes of tax basis tracking. You should contact a tax advisor.

No. AB is a partnership for tax purposes. As an investor in the partnership, you are a partner. Partnership cash distributions are not considered in determining the partner's distributive share of partnership income or loss. However, please note that cash distributions should be monitored at your end for purposes of tax basis tracking. You should contact a tax advisor.

Please click here to view the cash distribution amounts paid for AB.

The cash distribution reported on Schedule K-1 is not to be reported anywhere on your individual federal tax filing.

AllianceBernstein Holding L.P. (“AllianceBernstein Holding”) is a publicly traded limited partnership traded on the NYSE under the ticker symbol AB. AllianceBernstein Holding owns approximately 36% of the outstanding units of AllianceBernstein L.P. (“AllianceBernstein”), a private limited partnership. The asset-management business is conducted by AllianceBernstein L.P.

As of December 31, 2020, AllianceBernstein Holding L.P. owned approximately 36% of the issued and outstanding AllianceBernstein units and EQH, one of the largest global financial-services organizations, owned an approximate 62.3% economic interest in AllianceBernstein Holding.

AllianceBernstein Holding L.P. is a master limited partnership. Therefore, beneficial ownership in AllianceBernstein Holding is represented in limited partner units, not shares of corporate stock.

AllianceBernstein Holding does not have a direct stock purchase plan. Please contact a financial advisor to purchase AllianceBernstein Holding units.

We pay unitholders quarterly cash distributions generated from our operations. Because AllianceBernstein Holding is a partnership, quarterly distributions should not be reported on unitholders’ W2s or 1099s as dividend income (they are instead reported on Form Schedule K-1).

Cash distributions are typically paid out each quarter. The payable date is usually during the seventh or eighth week following the end of a quarter.

AllianceBernstein Holding declares distributions on the same days as its quarterly earnings releases (typically during the fourth week following the end of a quarter). Please refer to the Calendar of Events for the next earnings release date.

Yes. If you receive your quarterly distributions directly from AllianceBernstein Holding and not your financial institution, you can contact Mellon Investor Services, our transfer agent, at 866-737-9896, to have your distribution deposited directly.

We don’t have a dividend reinvestment program (DRIP). However, if you own AllianceBernstein Holding units through a financial institution that offers dividend reinvestment, you can instruct your financial representative to reinvest your quarterly distributions.

Please refer to our Distribution History for information on unit splits.

If you own your units through a financial institution, you should contact the financial institution directly. If you do not own units through a financial institution, please contact our transfer agent, Computershare, directly for information regarding your specific unit certificates, distribution payments and other account maintenance issues. AB Corporate Investor Relations does not have any unitholder information.

Computershare
P.O. Box 505000
Louisville, KY 40233

Telephone Inquiries: 866-737-9896
Website: www.computershare.com/investor
Email: web.queries@computershare.com

Unitholders are required to report their share of the partnership's taxable income on their tax returns. Approximately two months after the end of the calendar year, AllianceBernstein Holding provides a Schedule K-1 and explanatory reports to each unitholder. All unitholders are cautioned to file their tax returns only after they receive their Schedule K-1 the first week of March.

For questions, call our Mutual Fund Shareholder Services team at 800-221-5672. To order literature, call 800-227-4618. Corporate Investor Relations does not have any information on AB mutual funds.