Common use of Compensation Deduction Clause in Contracts

Compensation Deduction. If the Partnership is entitled to a deduction for compensation to a person providing services to the Partnership or its subsidiaries the economic cost of which is borne by a Partner (and not the Partnership or its subsidiaries), whether paid in cash, Class A Units or other property, the Partner who bore such economic cost shall be treated as having contributed to the Partnership such cash, Class A Units or other property, and the Partnership shall allocate the deduction attributable to such payment to such Partner. If any income or gain is recognized by the Partnership by reason of such transfer of property to the person providing services to the Partnership or its subsidiaries, such income or gain will be allocated to the Partner who transferred such property.