Reverse 704(c) Allocations Sample Clauses
The Reverse 704(c) Allocations clause governs how tax allocations are made when property with a book value different from its tax basis is distributed to a partner in a partnership. In practice, this clause ensures that any built-in gain or loss associated with the property is properly allocated among the partners, typically by tracking and allocating these differences over time as the property is depreciated or sold. The core function of this clause is to ensure that tax consequences are fairly and accurately distributed among partners, preventing any one partner from receiving an undue tax benefit or burden due to prior book-tax disparities.
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Reverse 704(c) Allocations. The Parties acknowledge and agree that as a result of the Reverse 704(c) Allocations, the Corporation’s share of amortization and depreciation deductions for U.S. federal income tax purposes (and applicable state and local income tax purposes) as a Member of ▇▇▇▇ Holdings will be increased from that which would have been allocated to the Corporation without regard to the requirement under Treasury Regulation Sections 1.704-1(b)(2)(iv)(f)(4) and 1.704-1(b)(4)(i) to make Reverse 704(c) Allocations.
Reverse 704(c) Allocations. In the event that the Gross Asset Value of Company assets is adjusted pursuant to the terms of this Agreement, subsequent allocations of income, gain, loss and deduction with respect to such asset shall consistently take into account any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in a manner consistent with Code Section 704(c) and Regulations Section 1,704-3(c). AmericasActive:11137715.3