Recapture Gain Clause Samples
The Recapture Gain clause defines how gains that were previously subject to certain tax benefits, such as depreciation or amortization, are treated when an asset is sold or disposed of. In practice, this clause specifies that any portion of the gain attributable to prior deductions must be "recaptured" and reported as ordinary income, rather than as capital gain, which may be taxed at a lower rate. This ensures that taxpayers do not receive a double tax benefit from both the initial deduction and favorable capital gains treatment, thereby maintaining fairness and compliance with tax regulations.
Recapture Gain. If any portion of gain recognized from the disposition of an asset by the Partnership represents the "recapture" of previously allocated deductions by virtue of the application of Code Section 1245 or 1250 ("RECAPTURE GAIN"), such Recapture Gain, solely for income tax purposes, shall be allocated as follows: FIRST, to the Partners, PRO RATA, in proportion to the lesser of each Partner's (i) allocable share of the total gain recognized from the disposition of such asset and (ii) share of depreciation or amortization with respect to such asset (under Regulations Sections 1.1245-1(e)(2) and (3)), until each such Partner has been allocated Recapture Gain equal to such lesser amount; and SECOND, the balance of Recapture Gain will be allocated among the Partners whose allocable shares of total gain exceed their shares of depreciation or amortization with respect to such asset (under Regulations Sections 1.1245-1(e)(2) and (3)), in proportion to their shares of total gain (including Recapture Gain) from the disposition of such asset; PROVIDED, however, that no Partner will be allocated Recapture Gain under this Section 3.2 in excess of the total gain allocated to such Partner from such disposition.
Recapture Gain. If any portion of gain recognized from the disposition of property by the Partnership represents the "recapture" of previously allocated deductions by virtue of the application of Code Section 1245 or 1250 ("Recapture Gain"), such Recapture Gain will be allocated as follows:
Recapture Gain. If taxable gain from a sale, exchange or disposition subject to Section 5.2 includes income treated as ordinary income for income tax purposes because it is attributable to the recapture of depreciation (“Recapture Gain”), the Recapture Gain shall be allocated to the Partners as nearly as possible in proportion to their depreciation allocations which were the source of the Recapture Gain. This subparagraph shall affect the character of an allocation to a Partner but not the total amount of the allocation to be made to such Partners as specified in this Article V.
Recapture Gain. As defined in Section 6.4.2.