Common use of Section 704(c) Allocation Clause in Contracts

Section 704(c) Allocation. In accordance with Section 704(c) of the Code and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take into account any variation between the adjusted cost basis of such property to the Company for federal income tax purposes and its initial fair market value, as reasonably determined by the Manager, at the time of contribution. In the event that the fair market value of any assets is adjusted pursuant to a revaluation of Company assets in accordance with Trea. Reg. Section 1.704-l(b)(2)(iv)(f), subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its fair market value as under Section 704(c) of the Code and the Regulations thereunder. The Managers shall make any elections or other decisions relating to such allocations in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 9.5(7) are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of profits, losses, other items, or distributions pursuant to any provision of this Agreement.