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Tax Information

Tax FAQs

We hope the answers to these questions regarding tax consequences of owning AllianceBernstein Holding publicly traded units (NYSE: AB) are helpful. If one of your questions is not answered here, please contact the AllianceBernstein Tax Department.
What is a Schedule K-1? Why is there no Form 1099?

Federal income tax law states that limited partnerships such as AllianceBernstein Holding are required to issue a Schedule K-1 to each Unitholder to report each Unitholder’s pro rata share of the partnership’s taxable income. Unitholders will use Schedule K-1 in preparing their individual tax forms.

A Form 1099 issued by your broker should not be used to report your pro rata share of the partnership’s taxable income on individual tax forms. A Form 1099 is sent by your broker and may include information with respect to cash distributions from partnerships are not typically reported by brokers on Form 1099.

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How does income reported on a Schedule K-1 differ from a Form 1099?

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 individual tax return. (The Tax Fact Sheet provides more information and an example.) As a partnership, Alliance Bernstein 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 forms .

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When are Schedule K-1s sent to Unitholders?

AllianceBernstein’s Tax Department strives to mail the Schedule K-1s on or before March 1, but it relies on reporting from brokers and financial institutions, which may cause delay in reporting to Unitholders.

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Why didn’t I receive a Schedule K-1 until after January 31st?

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

AllianceBernstein’s Tax Department strives to mail the Schedule K-1s on or before March 1, so that Unitholders may file their individual returns in a timely manner.

Unitholders can typically obtain their Schedule K-1s for the taxable year at the end of February of the following year by visiting the AllianceBernstein Tax website at www.taxpackagesupport.com/ab.

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Why did I get a Schedule K-1 on my IRA account?

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.

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Is the quarterly cash distribution considered dividend income?

The cash distribution AllianceBernstein Holding pays to its Unitholders on a quarterly basis is determined based on AllianceBernstein Holding’s available cash flow and is considered a return of capital to the Unitholder for tax purposes.

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

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Is the quarterly cash distribution considered interest income?

No. Generally, the quarterly cash distribution is considered to be a return of capital for tax purposes, and as noted in the question "How is the tax basis calculated?", reduces the ”tax basis” in AllianceBernstein Holding Units.

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

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What were the cash distribution amounts paid for AllianceBernstein Holding Units?

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

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Where do I report the cash distribution on my Form 1040?

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

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My AllianceBernstein Holding Units have been sold. Why was a Schedule K-1 sent?

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

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What should be done with Units that were inherited?

Units received through inheritance 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, Mellon Investor Services, to handle the transfer correctly. Additionally, you should contact a tax advisor.

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Is the income reported on Schedule K-1 from a limited partnership, such as AllianceBernstein Holding, considered Unrelated Business Taxable Income (UBTI)?

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.

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Can income reported on Schedule K-1 from a limited partnership offset passive losses from other investments to reduce your taxable income?

No.

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How is the “tax basis” calculated?

+ 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 AllianceBernstein Tax Department. The cumulative “tax basis” adjustment will be provided to you by the AllianceBernstein 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 Unitholder Tax Fact Sheet.

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What is the Capital Account?

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?", AllianceBernstein will provide cumulative “tax basis” adjustments.

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What is the Ownership Schedule attached with the Schedule K-1?

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 AllianceBernstein Tax web site at www.k1support.com/allianceholding or can be made by contacting the AllianceBernstein Tax Department at 800-526-3132 or via email @ k1help@alliancebernstein.com.

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Why is the amount shown on line 22 of the Schedule K-1 different than the total cash distributions I received for the year?

The amount on line 22 on 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.

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Although AllianceBernstein and AllianceBernstein Holding believe the information contained herein is accurate, the partnerships make no guarantee as to the completeness or application of this tax fact sheet to every individual or institutional investor situation. Please consult your tax advisor on specific issues related to your tax situation.

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