S Termination Year Sample Clauses

S Termination Year. Items of income, gain, loss, deduction and credit shall be allocated between the S short year (as defined in Section 1362(e)(1)(A) of the Code) and the C short year (as defined in Section 1362(e)(1)(B) of the Code) pursuant to Section 1.1362-3(b)(2) of the Code.

S Termination Year. Notwithstanding the provisions of Section 6.1, the transactions contemplated by this Agreement will cause the Company to terminate its status as an S corporation for United States federal income tax purposes, effective as of the date preceding the Closing (the "Termination Date"). Pursuant to section 1362(e)(1) of the Code, the Company shall have two short taxable years for the year that includes the Closing Date, an S short year beginning January 1 of such year and ending on the Termination Date and a C short year beginning on the Closing Date and ending on the next succeeding close of the Buyer's consolidated return taxable year. The Buyer and the Stockholders shall elect and shall consent, pursuant to section 1362(e)(3) of the Code, to allocate tax items to the S short year and the C short year pursuant to normal tax accounting rules (the "closing of the books method"). The allocation of such items shall be done on a basis consistent with the Company's past accounting practice and in a manner reasonably satisfactory to the Buyer and the Seller. The Stockholders covenant and agree that they have duly included, or will duly include, in their own income tax returns their allocable share of the Company's items of income, gain, loss, deduction or credit attributable to the S 37 37 short year and all prior periods as required by applicable law and shall pay any and all Taxes required to be paid with respect to such items for such taxable periods.

S Termination Year. The calendar year 1996 will be the Company's ------------------- S Termination Year for federal income tax purposes, as defined in Section 1362(e)(4) of the Code. Pursuant to Section 1362(e)(1) of the Code, the S Termination Year of the Company shall be divided into two short taxable years: an S Short Year and a C Short Year. As defined in Section 1362(e)(1)(A) of the Code, the S Short Year shall be that portion of the Company's S Termination Year ending on the day immediately preceding the Termination Date, and pursuant to Section 1362(e)(1)(B) of the Code, the C Short Year shall be that portion of the Company's S Termination Year beginning on the Termination Date and ending on the last day of the calendar year. For federal income tax purposes, the Company will be treated as an S corporation during its S Short Year and as a C corporation during its C Short Year.