Section 704(b) Allocations Clause Samples
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Section 704(b) Allocations. The allocation provisions contained in this Article VII are intended to result in allocations that are consistent with Section 704(b) of the Code and the Treasury Regulations promulgated thereunder, and shall be interpreted and applied in a manner consistent therewith. The Members further agree to make such amendments or changes to this Agreement as are reasonably requested by any Member in good faith and consistent with the understanding of the parties, to effectuate such intent.
Section 704(b) Allocations. (i) Each item of income, gain, loss, deduction or credit for U.S. federal income Tax purposes that corresponds to an item of income, gain, loss or expense that is either taken into account in computing Net Income or Net Loss or is specially allocated pursuant to Section 4.4 (a “Book Item”) shall be allocated among the Members in the same proportion as the corresponding Book Item is allocated among them pursuant to Section 4.3 or Section 4.4.
(ii) (A) If the Company recognizes Depreciation Recapture (as defined below) in respect of the sale of any Company asset:
(I) the portion of the gain on such sale which is allocated to a Member pursuant to Section 4.3 or Section 4.4 shall be treated as consisting of a portion of the Company’s Depreciation Recapture on the sale and a portion of the Company’s remaining gain on such sale under principles consistent with Regulations Section 1.1245-1; and
(II) if, for U.S. federal income Tax purposes, the Company recognizes both “unrecaptured Section 1250 gain” (as defined in Section 1(h) of the Code) and gain treated as ordinary income under Section 1250(a) of the Code in respect of such sale, the amount treated as Depreciation Recapture under Section 4.7(a)(ii)(A)(I) shall be comprised of a proportionate share of both such types of gain.
Section 704(b) Allocations. Subject to Section 5.04(a), each item of income, gain, loss, or deduction for federal income tax purposes that corresponds to an item of income, gain, loss or expense that is either taken into account in computing Income or Loss (a “Book Item”) shall be allocated among the Partners in the same proportion as the corresponding Book Item is allocated among them pursuant to Section 5.02 or 5.03 hereof.
Section 704(b) Allocations. (i) Each item of income, gain, loss, deduction or credit for Federal income tax purposes that corresponds to an item of income, gain, loss or expense that is either taken into account in computing Net Income or Net Loss or is specially allocated pursuant to Section 4.4 (a “Book Item”) shall be allocated among the Members in the same proportion as the corresponding Book Item is allocated among them pursuant to Section 4.3 or Section 4.4.
(ii) (A) If the Company recognizes Depreciation Recapture (as defined below) in respect of the sale of any Company asset:
(I) the portion of the gain on such sale which is allocated to a Member pursuant to Section 4.3 or Section 4.4 shall be treated as consisting of a portion of the Company’s Depreciation Recapture on the sale and a portion of the Company’s remaining gain on such sale under principles consistent with Regulations Section 1.1245-1; and
(II) if, for Federal income tax purposes, the Company recognizes both “unrecaptured Section 1250 gain” (as defined in Section l(h) of the Code) and gain treated as ordinary income under Section 1250(a) of the Code in respect of such sale, the amount treated as Depreciation Recapture under Section 4.7(a)(ii)(A)(I) shall be comprised of a proportionate share of both such types of gain. PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.