Section 743(b) Sample Clauses
Section 743(b) is a provision in the U.S. Internal Revenue Code that allows a partnership to adjust the basis of its assets when a partnership interest is transferred, typically by sale or exchange. When a new partner acquires an interest, the partnership can make a special election so that the new partner’s share of the partnership’s assets reflects the purchase price paid, rather than the partnership’s existing basis. For example, if a partner buys into a partnership at a value higher than the partnership’s current asset basis, the adjustment ensures the new partner receives appropriate tax benefits, such as depreciation or amortization. This clause’s core function is to prevent inequities in tax treatment among partners by aligning the new partner’s tax basis with their investment, thereby ensuring fairness and accuracy in the allocation of income, deductions, and gains or losses.
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Section 743(b). The Company may determine to depreciate the portion of an adjustment under section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation method and useful life applied to the Company’s common basis of such property, despite the inconsistency of such method with Regulation section 1.167(c)-1(a)(6), or any successor provisions. If the Company determines that such reporting position cannot reasonably be taken, the Company may adopt any reasonable depreciation convention that would not have a material adverse effect on the Members.
Section 743(b). The Partnership may determine to depreciate the portion of an adjustment under section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation method and useful life applied to the Partnership’s common basis of such property, despite the inconsistency of such method with Regulations section 1.167(c)-1(a)(6), or any successor provisions. If the Partnership determines that such reporting position cannot reasonably be taken, the Partnership may adopt any reasonable depreciation convention that would not have a material adverse effect on the Partners.