The PTP structure is an attractive business form for us because it allows the Partnership to pay out the majority of its earnings to its owners without first paying significant federal and state income taxes at the entity level, avoiding what is known in the corporate form as double taxation of earnings. The Partnership is, however, subject to a tax on its gross income to retain the PTP status.
Ownership of Cedar Fair units is different from an investment in corporate stock. Cash distributions made by the Partnership are treated as a reduction of basis and are generally not taxable. Instead, unitholders must pay tax only on their pro rata share of the Partnership's taxable income, which is generally lower. The Partnership provides the tax information necessary for filing each unitholder's federal, state and local tax returns on I.R.S. Schedule K-1 in early March each year. You may view your individual tax reporting package through this website each year when it is available in early March through December 31.
The tax consequences to a particular unitholder will depend on the circumstances of that unitholder; however, income from the Partnership may not be offset by passive tax losses from other investments. Prospective unitholders should consult their tax or financial advisors to determine the federal, state and local tax consequences of ownership of our limited partnership units.
Ownership of limited partnership units by IRA's, pension and profit-sharing plans and other tax-exempt organizations, non-resident aliens, foreign corporations and other foreign persons, and regulated investment companies may require different tax reporting than corporate stock.