Gain Recognition Clause Samples

Gain Recognition. Unless a non-recognition provision applies, and subject to the CPDI and market discount rules discussed above, Holders will generally recognized capital gain or loss upon the sale, redemption or other taxable disposition of the New Second Lien PIK Notes received pursuant to the Plan. Such capital gain will be long-term capital gain if, at the time of the sale, exchange, retirement, or other taxable disposition, the Holder held the New Second Lien PIK Notes for more than one year. Long-term capital gains of an individual taxpayer generally are taxed at preferential rates. The deductibility of capital losses is subject to certain limitations.

Gain Recognition. Any gain realized by a Non-U.S. Holder on the exchange of its Existing Notes Claim, or on the sale or other taxable disposition of New Notes, generally will not be subject to U.S. federal income taxation unless (a) the Non-U.S. Holder is an individual who was present in the United States for 183 days or more during the taxable year in which the taxable sale, exchange or other disposition occurs and certain other conditions are met or (b) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States (and if an income tax treaty applies, such gain is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States). If the first exception applies, to the extent that any gain is taxable, the Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30 percent (or at a reduced rate or exemption from tax under an applicable income tax treaty) on the amount by which such Non-U.S. Holder’s capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of the taxable sale, exchange or other disposition. If the second exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax with respect to any gain realized on the taxable sale, exchange or other disposition that is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States in the same manner as a U.S. Holder. In order to claim an exemption from withholding tax, such Non-U.S. Holder will be required to provide properly executed original copies of IRS Form W-8ECI (or such successor form as the IRS designates). In addition, if such a Non-U.S. Holder is a corporation, it may be subject to a branch profits tax equal to 30 percent (or such lower rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments.

Gain Recognition. The U.S. Subsidiary is not party to any gain recognition agreement under Section 367 of the Code.

Gain Recognition. Company is not a party to any gain recognition agreement under Section 367 of the Code.

Gain Recognition. Any gain recognized by a Non-U.S. Holder of Claims in Classes 3, 4, 5 and 9 generally will not be subject to U.S. federal income tax with respect to property (including Cash) received in exchange for such Claim, unless: a. such Non-U.S. Holder is engaged in a trade or business in the United States to which such gain is “effectively connected” for U.S. federal income tax purposes (and, if required, by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment or fixed base in the United States to which gain is attributable); or b. if such Non-U.S. Holder is an individual, such Holder is present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met. ▇▇▇▇ described in the first situation above generally will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a foreign corporation also may be subject to a branch profits tax at a rate of 30 percent (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items. ▇▇▇▇ described in the second situation above will be subject to U.S. federal income tax at a rate of 30 percent (or such lower rate specified by an applicable income tax treaty), which may be offset by certain U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses. Non-U.S. Holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

Gain Recognition. Except as provided in clause (ii) of this Section 2.5(b), LMI shall be liable for, and shall indemnify and hold harmless each member of the LMC Group from and against, any Adjustments and any AT&T TSA Liabilities resulting from the recognition of gain pursuant to a gain recognition agreement entered into by LMC (or any other parent of a consolidated group of which any member of the LMI Group was a member at any time prior to the Distribution Date) in accordance with Treasury Regulations Section 1.367(a)-8(b) ("Gain Recognition Agreements"), if the recognition of such gain results in an adjustment, pursuant to Treasury Regulations Section 1.367(a)-8(b)(3)(iv), to the basis of any property held by any member of the LMI Group.

Gain Recognition. No Acquired Company is a party to any gain recognition agreement under Section 367 of the Code.