There are income tax withholding requirements relating to cash distribution paid to foreign partners. For more information click here.
Effectively Connected Income (ECI)
The Board of Directors of Cedar Fair Management, Inc., as general partner of Cedar Fair, L.P., has declared a cash distribution of $0.925 per unit, payable September 17, 2019, to holders of record September 4, 2019. All of the distribution consists of income effectively connected with a U.S. business.
In accordance with IRS regulations, there are income tax withholding requirements relating to cash distributions paid to foreign partners. Under Section 1446 of the Internal Revenue Code the applicable withholding rate for publicly traded partnership distributions is 37.0%. This results in tax withholding equal to $0.3423 per unit held by foreign partners. Further, the regulations provide that if you comply with the requirements of the withholding under Section 1446, you will be deemed to have satisfied the requirements of Section 1445 (e)(1) of the Code (Foreign Investors in Real Property Tax Act of 1980).