Section 704(c) Allocations and Methods Sample Clauses
The Section 704(c) Allocations and Methods clause governs how tax items related to contributed property are allocated among partners in a partnership. It ensures that any built-in gain or loss on property contributed by a partner is properly allocated to that partner, rather than being shared by all partners, by using specific IRS-approved methods such as the traditional, traditional with curative, or remedial method. This clause is essential for maintaining tax fairness among partners and complying with IRS regulations, as it prevents the shifting of tax consequences related to pre-contribution gains or losses.
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Section 704(c) Allocations and Methods. The Operating Partnership shall elect to use the “traditional method” set forth in Section 1.704-3(b) of the Treasury Regulations with respect to the properties currently held indirectly by RKB and any replacement properties (the “Properties”) with a provision for a “curative” allocation of gain to the partners in RKB (or their successors in interest) upon a taxable disposition of any of the Properties in an amount sufficient to eliminate any remaining disparities between the book items and tax items of any other partners of the Operating Partnership with respect to the Properties attributable to the application of the “ceiling rule” under the “traditional method.”
Section 704(c) Allocations and Methods. The Operating Partnership shall elect to use the “traditional method” (without any curative or remedial actions) as set forth in Section 1.704-3(b) of the Treasury Regulations for making allocations under Section 704(c) of the Code with respect to the Property Interests.