Common use of Computation Rules Clause in Contracts

Computation Rules. For purposes of computing the amount of Net Income or Net Loss for any period, the determination, recognition, and classification of each item of income, gain, deduction or loss comprising such Net Income or Net Loss shall be the same as its determination, recognition, and classification for federal income tax purposes (including any method of depreciation, cost recovery, or amortization used for this purpose); provided, that unless otherwise required under Treasury Regulation Section 1.704-1(b)(2)(iv): (i) Solely for purposes of the application of the provisions hereof, the Partnership shall be treated as owning directly its proportionate share of all property owned by any partnership, joint venture, or similar entity in which the Partnership has an ownership interest (as determined by the Managing General Partner based upon the provisions of the governing documents of such entity). (ii) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery, or amortization attributable to a Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 4.8 or 4.9 to the Carrying Value of any Partnership property subject to depreciation, cost recovery, or amortization, any further deductions for such depreciation, cost recovery, or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery, or amortization derived under the same method and useful life as is applied for federal income tax purposes; provided, however, that if the asset has a zero adjusted basis, depreciation, cost recovery, or amortization, then deductions shall be determined using any reasonable method that the Managing General Partner may adopt. (iii) Any income, gain, or loss attributable to the taxable disposition of any property shall be determined by the Partnership as if the adjusted basis of such property as of the date of such disposition were equal in amount to the Partnership’s Carrying Value with respect to such property as of such date. (iv) If the Partnership’s adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to Section 50(c)(1) of the Code (or any analogous provisions), the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year that such property is placed in service and shall be allocated among the Partners pursuant to Article V. Any restoration of such basis pursuant to Section 50(c)(2) (or any analogous provision) of the Code shall be allocated in the same manner to the Partnership Interests to which such deemed deduction was allocated. (v) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) an interest in the Partnership that can neither be deducted nor amortized under Section 709 of the Code shall be treated as an item of deduction and shall be allocated among the Partners pursuant to Article V. (vi) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss, and deduction shall be made without regard to any election under Section 754 of the Code which may be made by the Partnership and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code (or treated as described in Treasury Regulation Section 1.704-1(b)(2)(iv)(i)), without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalizable for federal income tax purposes.

Computation Rules. For purposes of computing the amount of Net Income or Net Loss for any period, the determination, recognition, and classification of each item of income, gain, deduction or loss comprising to be reflected in a Capital Account, the determination, recognition and classification of any such Net Income or Net Loss item shall be the same as its determination, recognition, recognition and classification for federal income tax purposes (including any method of depreciation, cost recovery, recovery or amortization used for this purpose); provided, that unless otherwise required under Treasury Regulation Section 1.704-1(b)(2)(iv):provided that: (i) Solely solely for purposes of the application of the provisions hereof, the Partnership shall be treated as owning directly its proportionate share of all property owned by any partnership, joint venture, venture or similar entity in which the Partnership has an ownership interest (as determined by the Managing General Partner based upon the provisions of the governing documents of such entity), including without limitation, Terminix, Merry Maids and any other Operating Partnership, and any other Subsidiary which is classified as a partnership for federal income tax purposes. (ii) In in accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery, recovery or amortization attributable to a Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 4.8 5.7 or 4.9 5.8 to the Carrying Value of any Partnership property subject to depreciation, cost recovery, recovery or amortization, any further deductions for such depreciation, cost recovery, recovery or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery, recovery or amortization derived under the same method and useful life as is applied for federal income tax purposes; provided, however, that if the asset has a zero adjusted basis, depreciation, cost recovery, recovery or amortization, then amortization deductions shall be determined using any reasonable method that the Managing General Partner may adopt. (iii) Any income, gain, gain or loss attributable to the taxable disposition of any property shall be determined by the Partnership as if the adjusted basis of such property as of the date of such disposition were equal in amount to the Partnership’s Carrying Value with respect to such property as of such date. (iv) If the Partnership’s adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to Section 50(c)(148(q)(1) or 48(q)(3) of the Code (or any analogous provisions), the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year that such property is placed in service and shall be allocated among the Partners pursuant to Article V. Section 6.1. Any restoration of such basis pursuant to Section 50(c)(248(q)(2) (or any analogous provision) of the Code shall be allocated in the same manner to the Partnership Interests to which such deemed deduction was allocated. (v) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) an interest in the a Partnership Interest that can neither be deducted nor amortized under Section 709 of the Code shall be treated as an item of deduction and shall be allocated among the Partners pursuant to Article V.Section 6.1. (vi) Except as otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss, loss and deduction shall be made without regard to any election under Section 754 of the Code which may be made by the Partnership and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code (or treated as described in Treasury Regulation Section 1.704-1(b)(2)(iv)(i1(b)(2)(iv)(i)(3)), without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalizable for federal income tax purposes.