You will receive a Form 1099-DIV to report all distributions received during the year. Total taxable dividends are reported on Line 1 of Form 1099-DIV, while any amount classified as a return of capital is reported on Line 3.

A U.S. holder of Rattler common units should generally recognize capital gain or loss on a sale, exchange, certain redemptions or other taxable disposition of the common units. The capital gain or loss is determined based on the difference between the amount received and the shareholder’s adjusted tax basis in the common units.

Any capital gain or loss realized should be long-term if the U.S. holder’s holding period for the common units disposed is more than one year. Long-term capital gains of individuals are generally subject to a reduced U.S. federal income tax rate. The deductibility of net capital losses is generally limited.

Tax basis is generally determined based on the amount paid for each Rattler common unit. Tax basis in Rattler common units may be reduced to the extent that any future distributions are determined to constitute a return of capital. Tax basis information may be maintained by the shareholder’s investment broker, but if not then the shareholder will need to separately track their tax basis in Rattler common units.

U.S. holders of Rattler common units may be subject to backup withholding at a rate of 24% on dividends and on the proceeds of a disposition unless they furnish the withholding agent (for example, a broker) with a taxpayer identification number and certain other information to establish an exemption from backup withholding.

Backup withholding is not an additional tax. Any amounts withheld should be creditable against a U.S. holder’s U.S. federal income tax liability for the period in which the dividend was recognized or the disposition was made. Withholding is reported on Line 4 of the Form 1099-DIV, which should generally be attached to any tax return claiming a credit for such withholding. Please consult your tax advisor regarding your circumstances and eligibility to obtain an exemption from backup withholding.

Certain U.S. holders that are individuals, trusts or estates may be subject to an additional tax at a rate of 3.8% on certain net investment income, which will typically include taxable dividends received and gain recognized with respect to Rattler common units. For individual U.S. holders, this additional tax generally applies when income exceeds certain threshold amounts, specifically $250,000 if married and filing jointly or $125,000 if married and filing separately.

Unrelated Business Taxable Income (UBTI) is a type of taxable income that may be generated by a tax-exempt entity. UBTI may potentially result in tax-exempt entities being subject to an income tax on their UBTI. The Internal Revenue Code provides that taxable dividends and gains or losses from the disposition of property are generally not considered to be UBTI. Please consult your tax advisor for more detailed advice for your circumstances, including determining whether exceptions, such as the exception that treats debt financed income as UBTI, may apply.

Non-U.S. holders of Rattler common units are urged to consult their tax advisors regarding the tax implications of any distributions or dispositions of Rattler common units, as the tax implications may vary significantly from U.S. holders as discussed above.

Shareholders should consult a tax professional for tax advice. IRS Publication 550, Investment Income and Expenses, may also be helpful.