Special Allocations. (a) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith. (b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith. (c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement. (d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement. (e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage. (f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss. (g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage. (h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations. (i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made. (j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution. (k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 4 contracts
Sources: Limited Liability Company Agreement (NGL Energy Partners LP), Limited Liability Company Agreement (SemGroup Corp), Limited Liability Company Agreement (NGL Energy Partners LP)
Special Allocations. (a) If there is a net decrease in Company Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain (determined in accordance with the principles of Regulations Sections 1.704-2(d) and 1.704-2(i)) during any Allocation YearPartnership taxable year, each Member the Partners shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in the manner and amounts provided in Treasury Regulation an amount equal to their respective shares of such net decrease during such year, determined pursuant to Regulations Sections 1.704-2(f)(6), 1.704-2(g)(22(g) and 1.704-2(j)(2)(i2(i)(5), or any successor provision. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(f). This Section 8.03(a7.3(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement requirements in Treasury Regulation Section 1.704-2(f) such Sections of the Regulations and shall be interpreted consistently therewith; including that no chargeback shall be required to the extent of the exceptions provided in Regulations Sections 1.704-2(f) and 1.704-2(i)(4).
(b) Except as provided If any Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation Regulations Section 1.704-2(i)(41(b)(2)(ii)(d)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year(5) or (6), any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate the deficit balance in such Partner’s Adjusted Capital Account Balance created by such adjustments, allocations or distributions as promptly as possible; provided, that an allocation pursuant to this Section 7.3(b) shall be made only to the extent that a Partner would have a deficit Adjusted Capital Account Balance in excess of such sum after all other allocations provided for such Allocation Year (and, in this Article VII have been tentatively made as if necessary, subsequent Allocation Yearsthis Section 7.3(b) were not in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisionsthis Agreement. This Section 8.03(b7.3(b) is intended to comply with the chargeback “qualified income offset” requirement of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) the Code and shall be interpreted consistently therewith.
(c) In the event If any Member Partner has a deficit balance in its Capital Account at the end of any Allocation Fiscal Year which is in excess of the sum of (Ai) the amount such Member Partner is required obligated to restore, if any, pursuant to any provision of this Agreement, and (ii) the amount such Partner is deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections Regulations Section 1.704-2(g2(g)(1) and 1.704-2(i)(5), each such Member Partner shall be specially allocated items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c7.3(c) shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII VII have been tentatively made as if Section 7.3(b) and this Section 8.03(c7.3(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant Nonrecourse Deductions shall be allocated to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain Partners in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreementaccordance with their respective Percentage Interests.
(e) Partner Nonrecourse Deductions for any Allocation Year taxable period shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that Partner who bears the economic risk of loss with respect to the Member Nonrecourse Debt liability to which such Member Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(i2(j). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(gf) For purposes Any special allocations of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset income or gain pursuant to Section 734(bSections 7.3(b) or 743(b7.3(c) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to hereof shall be taken into account in determining Capital Accountscomputing subsequent allocations pursuant to Section 7.1 and 7.2 and this Section 7.3(f), so that the net amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), any items so allocated and such item of gain or loss shall be specially all other items allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thateach Partner shall, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each Partner if such Member under Section 8.02 and Section 8.03 allocations pursuant to Sections 7.3(b) or 7.3(c) had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madeoccurred.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 4 contracts
Sources: Texas Limited Partnership Agreement (HFF, Inc.), Limited Partnership Agreement (HFF, Inc.), Limited Partnership Agreement (HFF, Inc.)
Special Allocations. (a) If there is a net decrease any Member unexpectedly receives any adjustments, allocations, or distributions described in Company Minimum Gain during any Allocation YearTreasury Regulations. §1.704-1(b)(2)(ii)(d)(4), each Member shall be allocated (5), or (6), which create or increase an Adjusted Deficit Capital Account of the Member, then items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is consisting of a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share pro rata portion of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items each item of Company income income, including gross income, and gain for such Allocation Year (and, if necessary, subsequent Allocation Yearsyear) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall will be specially allocated items to the Capital Account of Company gross income the Member in an amount and gain in manner sufficient to eliminate, to the amount of such excess extent required by the Treasury Regulations, the Adjusted Deficit Capital Account so created as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c10.2(a) shall will be made only if and to the extent that such Member would have an Adjusted Deficit Capital Account Deficit after all other allocations provided for in this Article VIII Section 10.2 have been tentatively made as if this Section 8.03(c10.2(a) were not in this LLC Agreement. It is the intent that this Section 10.2(a) be interpreted to comply with the alternate test for economic effect set forth in Treasury Regulations §1.704-1(b)(2)(ii)(d).
(db) In the event If any Member has would have a deficit balance in its Capital Account at the end of any Allocation Fiscal Year which is in excess of the sum of (Ai) the amount such that the Member is required obligated to restore pursuant to the provisions of this Agreement Company under Treasury Regulations. §1.704-1(b)(2)(ii)(c), and (Bii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections Regulations. §§1.704-2(g2(g)(1) and 1.704-2(i)(5), then such Member shall will be specially allocated items of Company income (including gross income income) and gain in the amount of such the excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(d10.2(b) shall will be made only if and to the extent that such Member would have an Adjusted a deficit Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII Section 10.2 have been tentatively made as if Section 8.03(c10.2(a) hereof and this Section 8.03(d10.2(b) were not in this LLC Agreement.
(c) Except as otherwise provided in Treasury Regulations. §1.704-2(f), and notwithstanding any other provision of Section 10.2, if there is a net decrease in Company Minimum Gain during any Fiscal Year, then each Member will be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations. §1.704-2(g). Allocations pursuant to the previous sentence will be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated will be determined in accordance with Treasury Regulations. §§1.704-2(f)(6) and 1.704-2(j)(2). This Section 10.2(c) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations. §1.704- 2(f) and will be interpreted consistently therewith.
(d) Except as otherwise provided in Treasury Regulations. §1.704-2(i)(4), notwithstanding any other provision of Section 10.2, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, then each Entity which has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations. §1.704-2(i)(5), will be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations. §1.704-2(i)(4). Allocations pursuant to the previous sentence will be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated will be determined in accordance with Treasury Regulations. §§1.704-2(i)(4) and 1.704-2(j)(2). This Section 10.2(d ) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations. §1.704-2(i)(4) and will be interpreted consistently therewith. (e) Nonrecourse Deductions for any Allocation Fiscal Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall will be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted proportions they share Net Profits pursuant to such Section of the Treasury Regulations10.1(a)(ii).
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 4 contracts
Sources: Limited Liability Company Agreement (BioAmber Inc.), Limited Liability Company Agreement (BioAmber Inc.), Limited Liability Company Agreement (BioAmber Inc.)
Special Allocations. Notwithstanding any other provisions of this Section 6.1, the following special allocations shall be made on a Series by Series basis in the following order for each taxable period:
(ai) If Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Minimum Gain attributable to a Series during any Allocation Yeartaxable year, each Member Partner of such Series shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j)(2)(i). For purposes of this Section 6.1(b), each Partner’s Adjusted Capital Account balance for such Series shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Section 6.1 with respect to such taxable year. This Section 8.03(a6.1(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(46.1 (other than Section 6.1(b)(i) above), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain attributable to a Series during any Allocation Yeartaxable year, any Member Partner with a share of Member such Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable year shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2)(ii). For purposes of this Section 6.1(b), or each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any successor provisionsother allocations pursuant to this Section 6.1, other than Section 6.1(b)(i) above, with respect to such taxable year. This Section 8.03(b6.1(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 6.1(b)(i) and 6.1(b)(ii) above, in the event any Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) attributable to a Series, items of income and gain of such Series shall be allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in its Adjusted Capital Account attributable to such Series created by such adjustment, allocation or distribution as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 6.1(b)(i), 6.1(b)(ii), 6.1(b)(iv) or 6.1(b)(v). This Section 6.1(b)(iii) is intended to constitute a qualified income offset described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) After giving effect to the allocations in Sections 6.1(b)(i), 6.1(b)(ii) and 6.1(b)(iii):
(A) in the event that the Series LH Partners become obligated to make payments to the Series AC Partners, Series EA Partners or Series ME Partners pursuant to Section 6.2(c), Section 6.3(c) or Section 6.4(c), items of Partnership gross income and gain shall be allocated to the Series LH Partners in accordance with their respective Series LH Percentage Interests until the aggregate amounts of items allocated to the Series LH Partners pursuant to this Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the cumulative amount of payments made by the Series LH Partners to the Series AC Partners, Series EA Partners or Series ME Partners, as applicable, pursuant to Section 6.2(c), Section 6.3(c) or Section 6.4(c) for such taxable year and all prior taxable years;
(B) in the event that the Series AC Partners become obligated to make payments to the Series LH Partners pursuant to Section 6.5(c), items of Partnership gross income and gain shall be allocated to the Series AC Partners in accordance with their respective Series AC Percentage Interests until the aggregate amounts of items allocated to the Series AC Partners pursuant to this Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the cumulative amount of payments made by the Series AC Partners to the Series LH Partners pursuant to Section 6.5(c) for such taxable year and all prior taxable years;
(C) in the event that the Series EA Partners become obligated to make payments to the Series LH Partners pursuant to Section 6.5(d), items of Partnership gross income and gain shall be allocated to the Series EA Partners in accordance with their respective Series EA Percentage Interests until the aggregate amounts of items allocated to the Series EA Partners pursuant to this Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the cumulative amount of payments made by the Series EA Partners to the Series LH Partners pursuant to Section 6.5(d) for such taxable year and all prior taxable years; and
(D) in the event that the Series ME Partners become obligated to make payments to the Series LH Partners pursuant to Section 6.5(e), items of Partnership gross income and gain shall be allocated to the Series ME Partners in accordance with their respective Series ME Percentage Interests until the aggregate amounts of items allocated to the Series ME Partners pursuant to this Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the cumulative amount of payments made by the Series ME Partners to the Series LH Partners pursuant to Section 6.5(e) for such taxable year and all prior taxable years.
(v) In the event any Member Partner has a deficit balance in its Adjusted Capital Account attributable to a Series at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable year, such Member Partner shall be specially allocated items of Company gross income and gain of such Series in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c6.1(b)(v) shall be made only if and to the extent that such Member Partner would have an a deficit balance in its Adjusted Capital Account Deficit for such Series after all other allocations provided for in this Article VIII Section 6.1(b) (other than Section 6.1(b)(iii)) have been tentatively made as if Section 6.1(b)(iii) and this Section 8.03(c6.1(b)(v) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(evi) Nonrecourse Deductions attributable to a Series for any Allocation Year taxable year shall be allocated to the Members pro rata Partners of such Series in accordance with each Member’s Ownership Percentagetheir Percentage Interests for such Series.
(fvii) Member Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for any Allocation Year taxable year shall be allocated 100% to the Member Partner that bears the economic risk Economic Risk of loss Loss with respect to the Member Partner Nonrecourse Debt to which such Member Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member Partner bears the economic risk Economic Risk of loss Loss with respect to a Member Partner Nonrecourse Debt, such Member Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Members Partners in accordance with the ratios in which they share such economic risk Economic Risk of loss.
(gLoss. This Section 6.1(b)(vii) For purposes is intended to comply with the provisions of Treasury Regulation Section 1.7521.704-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company 2(i) and shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentageinterpreted consistently therewith.
(hviii) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital AccountsAccounts as a result of a distribution in liquidation of a Partner’s Partnership Interest in a Series, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Series Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulationsprovisions.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 4 contracts
Sources: Limited Partnership Agreement (Enbridge Energy Partners Lp), Limited Partnership Agreement (Enbridge Energy Partners Lp), Contribution Agreement (Enbridge Energy Partners Lp)
Special Allocations. (a) Losses attributable to a partner nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4)) shall be allocated in the manner required by Treasury Regulations Section 1.704-2(i). If there is a net decrease during a Taxable Year in Company Minimum Gain during any Allocation Yearpartner nonrecourse debt minimum gain (as defined in Treasury Regulations Section 1.704-2(i)(3)), each Member shall be allocated items of Company income and gain Profits for such Allocation Taxable Year (and, if necessary, for subsequent Allocation Taxable Years) shall be allocated to the Unitholders in the manner amounts and amounts provided in of such character as determined according to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2(i)(4).
(b) Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(44.3(a), if there is a net decrease in Member Nonrecourse Debt the Minimum Gain during any Allocation Taxable Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year each Unitholder shall be allocated items of Company income and gain Profits for such Allocation Taxable Year (and, if necessary, for subsequent Allocation Taxable Years) in the manner amounts and amounts provided in of such character as determined according to Treasury Regulation Sections Regulations Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(f), or any successor provisions. This Section 8.03(b4.3(b) is intended to comply be a minimum gain chargeback provision that complies with the chargeback requirements of items of income and gain requirement in Treasury Regulation Regulations Section 1.704-2(i)(4) 2(f), and shall be interpreted consistently in a manner consistent therewith.
(c) In the event If any Member Unitholder who unexpectedly receives an adjustment, allocation, or distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6) has a deficit balance in its Deficit Capital Account at as of the end of any Allocation Year in excess Taxable Year, computed after the application of Sections 4.3(a) and 4.3(b) but before the sum application of (A) the amount such Member is required to restore pursuant to the provisions any other provision of this Agreement and (B) the amount Article IV, then Profits for such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member Taxable Year shall be specially allocated items of Company gross income and gain to such Unitholder in the amount of such excess as quickly as possible; providedproportion to, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that of, such Member would have an Adjusted Deficit Capital Account Deficit after all other allocations provided for Account. This Section 4.3(c) is intended to be a qualified income offset provision as described in this Article VIII have been tentatively made as if this Treasury Regulations Section 8.03(c) were not 1.704-1(b)(2)(ii)(d), and shall be interpreted in this Agreementa manner consistent therewith.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant Subject to the other provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)Section 4.3, such Member shall be specially if Profits or Losses are allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Fiscal Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a4.3(a), (b), or (c), (d), (e), (f) then subsequent allocations of Profits and (h) (the “Required Allocations”) Losses shall be taken into account so thatmade, to the extent possible, to the Unitholders in such amounts so that the net amount of items of gross income, gain, loss Profits and deduction Losses allocated to each Member pursuant to this Section 4.3(d) and Sections 8.02 4.3(a), (b), and 8.03, together, shall be (c) are equal to the net amount of such items Profits and Losses that would have been allocated to each the Unitholders if such Member under Section 8.02 allocations pursuant to Sections 4.3(a), (b), and Section 8.03 (c) had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 3 contracts
Sources: Limited Liability Company Agreement (Sheridan Group Inc), Limited Liability Company Agreement (Sheridan Group Inc), Limited Liability Company Agreement (McCormick & Schmick Holdings, L.L.C.)
Special Allocations. (a) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event a Member unexpectedly receives any Member has a deficit balance adjustment, allocation or distribution described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g) and 1.704-2(i)(51(b)(2)(ii)(d)(4), such Member (5) or (6) that causes or increases an Adjusted Capital Account Deficit, items of partnership income and gain shall be specially allocated items of Company gross income and gain in the amount of to such excess Member so as to eliminate such negative balance as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c3.2(a) shall be made only if and to the extent that such the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII 3 have been tentatively made as if this Section 8.03(c3.2(a) were not in this AgreementSchedule J. This subparagraph is intended to constitute a “qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith.
(db) In the event any If a Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of taxable year that exceeds the sum of (Ai) the amount such that Member is required obligated to restore, and (ii) the amount the Member is deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), then each such Member shall be specially allocated items of Company gross income and gain of the Nevada JV in the amount of such the excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(d3.2(b) shall be made only if and only to the extent that such the Member would have an Adjusted a deficit in such Member’s Capital Account Deficit after all other allocations provided for in this Article VIII 3 have been tentatively made without considering this Section 3.2(b).
(c) Nonrecourse Deductions for any Fiscal Year of Nevada JV shall be allocated rateably among the Members based upon the manner in which such Members are entitled to share in distributions under Section 8.1(b)(ii) of the Agreement.
(d) Except as otherwise provided in Section 1.704-2(f) of the Treasury Regulations, if there is a net decrease in Partnership Minimum Gain for any Fiscal Year of Nevada JV, each Member shall be specially allocated items of partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Partnership Minimum Gain, determined in accordance with Treasury Regulations Section 8.03(c1.704-2(g). The items to be so allocated shall be determined in accordance with Sections 1.704-2(f) and (j)(2) of the Treasury Regulations. This Section 3.2(d) is intended to comply with the minimum gain chargeback requirement in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this Section 8.03(d) were not subparagraph shall be made in this Agreementproportion to the respective amounts required to be allocated to each Member pursuant hereto.
(e) Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Deductions Debt during any Fiscal Year of Nevada JV, each Member who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be specially allocated items of partnership income and gain for any Allocation such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to that Member’s share of the net decrease in the Partner Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in the manner required by Section 1.704-2(i) of the Treasury Regulations. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2) of the Treasury Regulations. This Section 3.2(e) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph shall be made in proportion to the respective amounts to be allocated to the Members pro rata in accordance with each Member’s Ownership PercentageMember pursuant hereto.
(f) Member Partner Nonrecourse Deductions for any Allocation Fiscal Year of Nevada JV or other applicable period with respect to a Partner Nonrecourse Debt shall be specially allocated 100% to the Member Members that bears bear the economic risk of loss with respect to the Member for such Partner Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section (as determined under Sections 1.704-2(i2(b)(4) and 1.704-2(i)(1) of the Treasury Regulations.). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset of Nevada JV, pursuant to Code Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital AccountsAccounts as the result of a distribution to a Member in complete liquidation of such Member’s interest in Nevada JV, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall be specially allocated to the Members in a manner consistent accordance with their interests in Nevada JV in the manner in which their Capital Accounts are required to be adjusted pursuant to such event Regulations Section of the Treasury Regulations.
(i1.704-1(b)(2)(iv)(m)(2) Notwithstanding any other provision of this Section 8.03applies, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, or to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated Member to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of whom such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected distribution was made in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in event Regulations Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1(b)(2)(iv)(m)(4) applies.
Appears in 3 contracts
Sources: Limited Liability Company Agreement (Barrick Gold Corp), Limited Liability Company Agreement (Newmont Goldcorp Corp /De/), Limited Liability Company Agreement
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1 In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2 Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3 In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4 Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5 Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6 The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.74 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.74.1 through 1.1.74.5.
Appears in 3 contracts
Sources: Limited Partnership Agreement (Brookfield Infrastructure Partners L.P.), Limited Partnership Agreement (Brookfield Infrastructure Partners L.P.), Limited Partnership Agreement
Special Allocations. Notwithstanding anything that may be to the contrary in this Agreement, the following allocations shall be made prior to any other allocations under this Agreement and in the following order of priority:
(a) If Minimum gain shall be allocated as follows:
(i) Except as otherwise provided in Treas. Reg. § 1.704-2(f), if there is a net decrease in Company Minimum Gain during any Allocation YearFiscal Year or period, each Member shall be specially allocated items of Company income and gain for such Allocation Fiscal Year or period (and, if necessary, subsequent Allocation YearsFiscal Years or periods) in an amount equal to such Member’s share of the manner and amounts provided net decrease in Treasury Regulation Sections Company Minimum Gain to the extent required by Treas. Reg. § 1.704-2(f)(62(f), . The items to be so allocated shall be determined in accordance with Treas. Reg. §§ 1.704-2(g)(22(f) and 1.704-2(j)(2)(i(i), or any successor provision. This Section 8.03(a) provision is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section requirements of Treas. Reg. § 1.704-2(f) and shall be interpreted and applied consistently therewith. Allocations pursuant to this Section 6.04(a)(i) shall be made in proportion to the respective amounts required to be allocated to each Member pursuant hereto.
(bii) Except as otherwise provided in Treasury Regulation Section Treas. Reg. § 1.704-2(i)(4), if there is a net decrease in the Member Nonrecourse Debt Minimum Gain during any Allocation YearFiscal Year or period, any each Member with who has a share of the Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year Gain, determined in accordance with Treas. Reg. § 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Allocation Fiscal Year or period (and, if necessary, subsequent Allocation YearsFiscal Years or periods) in an amount equal to that Member’s share of the net decrease in the Member Nonrecourse Debt Minimum Gain to the extent and in the manner and amounts provided required by Treas. Reg. § 1.704-2(i). The items to be so allocated shall be determined in Treasury Regulation Sections accordance with Treas. Reg. §§ 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2), or any successor provisions. This Section 8.03(b) provision is intended to comply with the minimum gain chargeback of items of income and gain requirement with respect to Member Nonrecourse Debt contained in Treasury Regulation Section Treas. Reg. § 1.704-2(i)(4) and shall be interpreted and applied consistently therewith. Allocations pursuant to this Section 6.04(a)(ii) shall be made in proportion to the respective amounts required to be allocated to each Member pursuant hereto.
(b) If a Member unexpectedly receives any adjustments, allocations or distributions described in Treas. Reg. §§ 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that would not prevent such Member from having, or would cause such Member to have, an Adjusted Capital Account Deficit, then items of Company income (including gross income) and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, as quickly as possible, such Adjusted Capital Account Deficit. This Section 6.04(b) is intended to constitute a “qualified income offset” under Treas. Reg. § 1.704-l(b)(2)(ii)(d) and shall be interpreted and applied consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)Nonrecourse Deductions, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; providedif any, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Fiscal Year or period shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentagetheir respective Percentage Interests.
(fd) Member Nonrecourse Deductions Deductions, if any, for any Allocation Fiscal Year or period with respect to a Member Nonrecourse Debt shall be specially allocated 100% to the Member that bears the economic risk of loss with respect to the for such Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section (as determined under Treas. Reg. §§ 1.704-2(i2(b)(4) and 1.704-2(i)(1). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss).
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(he) To the extent an adjustment to the adjusted tax basis of any asset of the Company asset pursuant to Section 734(b) of the Code or Section 743(b) of the Code is required, pursuant to Treasury Regulation Section Treas. Reg. § 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall be specially allocated to among the Members in a manner consistent with the manner in which each of their respective Capital Accounts are required to be adjusted pursuant to such Section section of the Treasury Regulations.
(if) Notwithstanding any other provision of this Section 8.03, the The allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (hSection 6.04(a)-(e) (the “Required Regulatory Allocations”) shall be taken into account so are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, the net amount all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of gross Company income, gain, loss and or deduction. Therefore, notwithstanding any other provision of this Agreement (other than the Regulatory Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss or deduction allocated in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to each Member pursuant to Sections 8.02 and 8.03the extent possible, together, shall be equal to the net amount of Capital Account balance such items that Member would have been had if the Regulatory Allocations were not part of this Agreement and all Company items were allocated pursuant to each Section 6.03. In exercising discretion with respect to such offsetting special allocations, the Managing Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may shall take into account future Required Regulatory Allocations under Section 6.04(a) that, although not yet made, are likely to offset other Required Regulatory Allocations previously mademade under Section 6.04(c) or 6.04(d).
(jg) Items Any deductions attributable to guaranteed payments under Section 707(c) of incomethe Code, gainand if the amount of such guaranteed payments shall not be sufficient, loss and deduction realized afterother expenses deductible under the Code, or in anticipation of, a Dissolution Event shall be allocated in a manner that will causeallocated, among the Members prior to the allocation of Net Profits or Net Losses pursuant to Section 6.03, to the extent possible, the ratio of each Member’s Capital Account necessary to the sum of all Members’ cause their Capital Accounts to be equal in proportion to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distributiontheir Percentage Interests.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 3 contracts
Sources: Limited Liability Company Agreement (RCS Capital Corp), Limited Liability Company Agreement (RCS Capital Corp), Limited Liability Company Agreement (RCS Capital Corp)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 3 contracts
Sources: Limited Partnership Agreement (TransMontaigne Partners L.P.), Limited Partnership Agreement (Enterprise Products Operating L P), Limited Partnership Agreement (Rio Vista Energy Partners Lp)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.72 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.72.1 through 1.1.72.5.
Appears in 3 contracts
Sources: Limited Partnership Agreement (Brookfield Business Partners L.P.), Limited Partnership Agreement (Brookfield Business Partners L.P.), Limited Partnership Agreement
Special Allocations. Notwithstanding any provisions of Section 6.1, the following special allocations shall be made in the following order of priority:
(a) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year Chargeback (and, if necessary, subsequent Allocation Years) in the manner and amounts Nonrecourse Liabilities). Except as otherwise provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in of the Treasury Regulation Section 1.704-2(i)(4)Regulations, if there is a net decrease in Member Nonrecourse Debt Partnership Minimum Gain during for any Allocation Fiscal Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year each Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain to the extent required by Treasury Regulations Section 1.704-2(f). The items to be so allocated shall be determined in accordance with Sections 1.704-2(f) and (j)(2) of the Treasury Regulations. This subparagraph is intended to comply with the minimum gain chargeback requirement in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in the Partner Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in the manner and amounts provided required by Section 1.704-2(i) of the Treasury Regulations. The items to be so allocated shall be determined in Treasury Regulation accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 3 contracts
Sources: Limited Partnership Agreement (Shopoff Properties Trust, Inc.), Limited Partnership Agreement (Shopoff Properties Trust, Inc.), Limited Partnership Agreement (Shopoff Properties Trust, Inc.)
Special Allocations. Notwithstanding any provisions of Section 5.1, the following special allocations shall be made, to the least extent necessary to satisfy section 704(b) of the Code and the Regulations promulgated thereunder, in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net decrease in Company Partnership Minimum Gain during for any Allocation YearPartnership fiscal year (except as a result of conversion or refinancing of Partnership indebtedness, certain capital contributions or revaluation of the Partnership property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Member Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to that Partner's share of the manner and amounts provided net decrease in Treasury Partnership Minimum Gain. The items to be so allocated shall be determined in accordance with Regulation Sections Section 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(aparagraph
(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this paragraph (a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto.
(b) Except Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any fiscal year (other than due to the conversion, refinancing or other change in the debt instrument causing it to become partially or wholly nonrecourse, certain capital contributions, or certain revaluations of Partnership property (as provided further outlined in Treasury Regulation Section 1.704-2(i)(4))), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year each Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to the manner and amounts provided Partner's share of the net decrease in Treasury the Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2), or any successor provisions. This Section 8.03(bparagraph (b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) the Regulations and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation . Allocations pursuant to this Section 8.03(cparagraph (b) shall be made only if and in proportion to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is respective amounts required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership PercentagePartner pursuant hereto.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Trump Hotels & Casino Resorts Inc), Limited Partnership Agreement (Trump Hotels & Casino Resorts Funding Inc)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i). For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding any other provision of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii). For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionsother allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Tc Pipelines Lp), Limited Partnership Agreement (Tc Pipelines Lp)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(c)(vi) and 6.1(c)(vii)). This Section 8.03(a6.1(c)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(c)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c), other than Section 6.1(c)(i) and other than an allocation pursuant to Sections 6.1(c)(vi) and 6.1(c)(vii), with respect to such taxable period. This Section 8.03(b6.1(c)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Enterprise Products Partners L P), Merger Agreement (Enterprise GP Holdings L.P.)
Special Allocations. At the end of each Fiscal Year and notwithstanding any provision of Section 10.2, the following special allocations shall be made both for Capital Account and for federal income tax purposes unless otherwise provided:
(a) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply In accordance with the Company Minimum Gain chargeback requirement in ordering rules of Treasury Regulation Section 1.704-2(f) 2(j), items of gross income and realized gain first shall be interpreted consistently therewith.
(b) Except as provided allocated in an amount and in a manner that complies with the “chargeback” requirement of Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share the “qualified income offset” requirement of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) 1(b)(2)(ii)(d), and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end “minimum gain chargeback” requirement of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections Section 1.704-2(g) and 2(f). Further, any “partner non-recourse deductions” within the meaning of Treasury Regulation Section 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant 2(i)(2) attributable to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704“partner non-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year recourse debt” shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that who bears the “economic risk of loss with respect to the Member Nonrecourse Debt to which loss” for such Member Nonrecourse Deductions are attributable debt in accordance with Treasury Regulation Section 1.704-2(i). Any losses in excess of the losses allowable to the Members pursuant to the Treasury Regulations promulgated under Code Section 704(b) shall first be allocated to the extent allowable hereunder to Members who are not precluded from receiving such allocations by the preceding provisions of this subparagraph (a), if any, and shall thereafter be allocated as provided in Section 10.2.
(b) If more than one Member bears a taxing authority ignores the economic risk characterization of loss with respect any amounts paid to a Member Nonrecourse Debt(or an Affiliate thereof) as salaries, management fees, commissions, interest or other compensation for services (“Compensation”), and refuses to treat such payments as either guaranteed payments within the meaning of Code Section 707(c) or payments made to such Member other than in such Member’s capacity as a “partner” within the meaning of Code Section 707(a), and such taxing authority ultimately treats such amounts paid to a Member (or an affiliate thereto) as a distribution to such Member for federal income tax purposes which reduces such Member’s Capital Account, then the Compensation shall be treated as an allocation of an item of income or gain of the Company to the recipient Member so that, consistent with the intent of the Members, the Compensation shall not be treated as a distribution which reduces the recipient Member’s Capital Account. Accordingly, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata first available items of Company income and gain (including in accordance with each Member’s Ownership Percentagea succeeding year) in an amount equal to the Compensation.
(hc) To If the extent an adjustment to Company owns (x) any Property contributed by a Member that had a fair market value different from its adjusted basis for federal income tax purposes on the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) date of the Code is requiredcontribution, or (y) any Property that has been revalued pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m1(b)(2)(iv)(f), to be taken into account in determining then for federal income tax purposes only and not for Capital AccountsAccount purposes, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and or deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal with respect to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously Property shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(kin accordance with Code Section 704(c) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating Treasury Regulations thereunder. Pursuant to the maintenance “traditional method” of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with making Code Section 704(c) allocations described in Treasury Regulations Sections Regulation Section 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement3(b).
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Piedmont Natural Gas Co Inc), Limited Liability Company Agreement (Agl Resources Inc)
Special Allocations. The following special allocations shall be made in the following order:
(a) If Except as otherwise provided in Regulations Section 1.704-2(f), and notwithstanding any other provision of this Article VIII, if there is a net decrease in Company Partnership Minimum Gain during any Allocation Fiscal Year, each Member Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Fiscal Year (and, if necessary, subsequent Allocation Fiscal Years) in an amount equal to such Partner’s share of the manner and amounts provided net decrease in Treasury Regulation Partnership Minimum Gain, determined in accordance with Regulations Section 1.704- 2(g). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i2(j)(2), or any successor provision. This Section 8.03(a8.6(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as otherwise provided in Treasury Regulation Regulations Section 1.704-2(i)(4), and notwithstanding any other provision of this Article VIII, if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Allocation Partnership Fiscal Year, any Member with each Partner who has a share of Member the Partner Nonrecourse Debt Minimum Gain at the beginning of attributable to such Allocation Year Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company Partnership income and gain for such Allocation Fiscal Year (and, if necessary, subsequent Allocation Fiscal Years) in an amount equal to such Partner’s share of the manner and amounts provided net decrease in Treasury Regulation Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(2), or any successor provisions. This Section 8.03(b8.6(b) is intended to comply with the minimum gain chargeback of items of income and gain requirement in Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance Partner unexpectedly receives any adjustments, allocations, or distributions described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g) and l(b)(2)(ii)(d)(4), 1.704-2(i)(5l(b)(2)(ii)(d)(5), such Member or 1.704-1 (b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated items of Company gross income to each such Partner in an amount and gain in manner sufficient to eliminate, to the amount extent required by the Regulations, the Adjusted Capital Account Deficit of such excess Partner as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c8.6(c) shall be made only if and to the extent that such Member Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made made, as if this Section 8.03(c8.6(c) were not in this Agreement.
(d) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Year in excess of the sum of (A) the amount Partnership Fiscal Year, each such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member Partner shall be specially allocated items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(d8.6(d) shall be made only if and to the extent that such Member Partner would have an Adjusted a deficit Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c8.6(c) hereof and this Section 8.03(d8.6(d) were not in this Agreement.
(e) Partner Nonrecourse Deductions for any Allocation Fiscal Year shall be allocated to the Members pro rata among the Partners in accordance with each Member’s Ownership Percentageproportion to their respective Percentage Interests.
(f) Member Any Partner Nonrecourse Deductions for any Allocation Fiscal Year shall be specially allocated 100% to the Member that Partner who bears the economic risk of loss with respect to the Member Partner Nonrecourse Debt to which such Member Partner Nonrecourse Deductions are attributable attributable, in accordance with Treasury Regulation Regulations Section 1.704-2(i2(i)(l). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Code Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m1.704- l(b)(2)(iv)(m)(2), to be taken into account in determining Capital AccountsAccounts as the result of a distribution to a Partner in complete liquidation of its interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall be specially specifically allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required Partner to be adjusted pursuant to whom such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously distribution was made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Hines Real Estate Investment Trust Inc), Limited Partnership Agreement (Hines Real Estate Investment Trust Inc)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.86 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.86.1 through 1.1.86.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Brookfield Renewable Energy Partners L.P.), Limited Partnership Agreement (Brookfield Renewable Energy Partners L.P.)
Special Allocations. Before any allocations are made pursuant to Section 6.1, Section 6.2 or Section 14 (a) If there is a net decrease in Company Minimum Gain during any Allocation Yearas such Sections may be modified by Section 6.5), each Member the following special allocations shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) made in the manner following order:
6.3.1 The Manager may make such special allocations, and amounts provided in Treasury Regulation apply Sections 1.704-2(f)(6)6.1 and 6.2 with such modifications, 1.704-2(g)(2as it determines to be appropriate (i) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement rules set forth in the Treasury Regulation Regulations under Section 1.704-2(f704(b) of the Code governing (a) allocations of "nonrecourse deductions," "partner nonrecourse deductions" and shall be interpreted consistently therewith.
other items lacking "economic effect" and (b) Except as provided in "minimum gain chargebacks" and "partner nonrecourse debt minimum gain chargebacks," and (ii) for this Agreement to contain a "qualified income offset" provision within the meaning of the Treasury Regulation Regulations under Section 1.704-2(i)(4)704(b) of the Code. In no event, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during however, shall any Allocation Year, such special allocations or modifications affect the amount or timing of any distribution to be made to any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewithhereunder.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) 6.3.2 To the extent an adjustment to the adjusted tax basis of any asset of the Company asset pursuant to Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)l(b)(2)(iv)(m) of the Treasury Regulations, to be taken into account in determining Capital Accountscapital accounts, the amount of such adjustment to the Capital Accounts capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basisthe basis of the asset), and such item of gain or loss shall be specially allocated to the Members in a manner that is consistent with the manner in which their Capital Accounts capital accounts are required to be adjusted pursuant to such Section 1.704-l(b)(2)(iv)(m) of the Treasury Regulations.
6.3.3 To the extent that any portion of the Management Fee payment is determined by the Manager to be a distribution to any Member and not a guaranteed payment within the meaning of Section 707(c) of the Code (i) Notwithstanding any other provision of this Section 8.03, the allocations set forth or a payment for services provided in Sections 8.03(aa non-Member capacity), an amount of gross income of the Company equal to the amount of such payment (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thatand, to the extent possible, of the net amount same character as the income of items of gross income, gain, loss and deduction allocated the Company giving rise to each Member pursuant to Sections 8.02 and 8.03, together, such payment) shall be equal to the net amount of such items that would have been specially allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if .
6.3.4 Any interest or other expense incurred by the Company in connection with any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously borrowing made pursuant to Section 5.3 shall be specially allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distributionto CDI.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Comdisco Holding Co Inc), Limited Liability Company Agreement (Comdisco Holding Co Inc)
Special Allocations. Notwithstanding any other provisions of this Section 6.2, the following special allocations shall be made in the following order for each taxable period:
(ai) If Notwithstanding any other provision of this Section 6.2, if there is a net decrease in Company Minimum Gain during any Allocation Yeartaxable year, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j)(2)(i). For purposes of this Section 6.2(b), each Partner’s Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Section 6.2 with respect to such taxable year. This Section 8.03(a6.2(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(46.2 (other than Section 6.2(b)(i) above), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation Yeartaxable year, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable year shall be allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2)(ii). For purposes of this Section 6.2(b), or each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any successor provisionsother allocations pursuant to this Section 6.2, other than Section 6.2(b)(i) above, with respect to such taxable year. This Section 8.03(b6.2(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 6.2(b)(i) and 6.2(b)(ii) above, in the event any Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in its Adjusted Capital Account created by such adjustment, allocation or distribution as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 6.2(b)(i), 6.2(b)(ii) or 6.2(b)(iv). This Section 6.2(b)(iii) is intended to constitute a qualified income offset described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) In the event any Member Partner has a deficit balance in its Adjusted Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable year, such Member Partner shall be specially allocated items of Company Partnership gross income and gain in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c6.2(b)(iv) shall be made only if and to the extent that such Member Partner would have an a deficit balance in its Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII Section 6.2(b) (other than Section 6.2(b)(iii)) have been tentatively made as if Section 6.2(b)(iii) and this Section 8.03(c6.2(b)(iv) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(ev) Nonrecourse Deductions for any Allocation Year taxable year shall be allocated to the Members pro rata Partners in accordance with each Member’s Ownership Percentagetheir Sharing Ratios.
(fvi) Member Partner Nonrecourse Deductions for any Allocation Year taxable year shall be allocated 100% to the Member Partner that bears the economic risk Economic Risk of loss Loss with respect to the Member Partner Nonrecourse Debt to which such Member Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member Partner bears the economic risk Economic Risk of loss Loss with respect to a Member Partner Nonrecourse Debt, such Member Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Members Partners in accordance with the ratios in which they share such economic risk Economic Risk of loss.
(gLoss. This Section 6.2(b)(vi) For purposes is intended to comply with the provisions of Treasury Regulation Section 1.7521.704-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company 2(i) and shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentageinterpreted consistently therewith.
(hvii) To the extent an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Section Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital AccountsAccounts as a result of a distribution in liquidation of a Partner’s Interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulationsprovisions.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: General Partnership Agreement (Regency Energy Partners LP), General Partnership Agreement (Regency Energy Partners LP)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section
1. 704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.82 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.82.1 through 1.1.82.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Brookfield Renewable Energy Partners L.P.), Limited Partnership Agreement (BRP Bermuda Holdings I LTD)
Special Allocations. For each Fiscal Year or period thereof, the following items of Income and Loss shall be specially allocated to the Partners as follows, before allocations of Net Income or Net Loss are made pursuant to Section 4.1:
(a) If there is a net decrease in Company Minimum Gain during Partner unexpectedly receives any Allocation Yearadjustment, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided allocation or distribution described in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(41(b)(2)(ii)(d)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years5) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(iior (6), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement (including gross income) shall be specially allocated to the Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulation regulations, the deficit balance in the Partner's Capital Account as quickly as possible. This Section 1.704-2(i)(44.2(a) and shall be interpreted consistently therewithwith Treasury regulations Section 1.704-1(b)(2)(ii)(d).
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(hb) To the extent an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Section under Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), required to be taken into account in determining Capital AccountsAccounts under Treasury regulations Section 1.704-1(b)(2)(iv)(m), the amount of such adjustment to the Capital Accounts Account adjustment shall be included in determining items of Income or Loss and treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), the basis of the asset) and such item of gain or loss shall be specially allocated to the Members in a manner Partners consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to by such Section of the Treasury Regulationsregulation.
(ic) Notwithstanding To minimize any other provision of this distortions in the manner that the Partners would have shared distributions if the special allocations required by Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f4.2(a) and (hSection 4.2(b) (the “Required Allocations”"REGULATORY ALLOCATIONS") shall be taken into account had not been part of this Agreement, the General Partner may specially allocate to the Partners offsetting items of Income or Loss so thatthat the net amounts allocated to each Partner pursuant to Sections 4.1 and Section 4.2 will, to the extent possible, equal the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items amounts that would have been allocated to each such Member under Partner pursuant to Section 8.02 and Section 8.03 4.1 if the Regulatory Allocations had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition part of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Gainsco Inc), Agreement of Limited Partnership (Gainsco Inc)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.81 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.81.1 through 1.1.81.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Brookfield Property Partners L.P.), Limited Partnership Agreement (Brookfield Property Partners L.P.)
Special Allocations. (a) If there is In the event, a net decrease Member unexpectedly receives any adjustment, allocation or distribution described in Company Minimum Gain during any Allocation YearTreasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), each Member shall be allocated (5) or (6) that causes or increases an Adjusted Capital Account Deficit, items of Company partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of to such excess Member so as to eliminate such negative balance as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c3.2(a) shall be made only if and to the extent that such the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII 3 have been tentatively made as if this Section 8.03(c3.2(a) were not in this AgreementSchedule J. This subparagraph is intended to constitute a “qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpreted consistently therewith.
(db) In the event any If a Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of taxable year that exceeds the sum of (Ai) the amount such that Member is required obligated to restore, and (ii) the amount the Member is deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g1.704 2(g)(1) and 1.704-1.704 2(i)(5), then each such Member shall be specially allocated items of Company gross income and gain of the Nevada JV in the amount of such the excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(d3.2(b) shall be made only if and only to the extent that such the Member would have an Adjusted a deficit in such Member’s Capital Account Deficit after all other allocations provided for in this Article VIII 3I have been tentatively made without considering this Section 3.2(b).
(c) Nonrecourse Deductions for any Fiscal Year of Nevada JV shall be allocated rateably among the Members based upon the manner in which such Members are entitled to share in distributions under Section 8.1(b)(ii) of the Agreement.
(d) Except as otherwise provided in Section 1.704-2(f) of the Treasury Regulations, if there is a net decrease in Partnership Minimum Gain for any Fiscal Year of Nevada JV, each Member shall be specially allocated items of partnership income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Partnership Minimum Gain, determined in accordance with Treasury Regulations Section 8.03(c1.704-2(g). The items to be so allocated shall be determined in accordance with Sections 1.704-2(f) and (j)(2) of the Treasury Regulations. This Section 3.2(c) is intended to comply with the minimum gain chargeback requirement in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this Section 8.03(d) were not subparagraph shall be made in this Agreementproportion to the respective amounts required to be allocated to each Member pursuant hereto.
(e) Except as otherwise provided in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Deductions Debt during any Fiscal Year of Nevada JV, each Member who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations, shall be specially allocated items of partnership income and gain for any Allocation such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to that Member’s share of the net decrease in the Partner Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in the manner required by Section 1.704-2(i) of the Treasury Regulations. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2) of the Treasury Regulations. This Section 3.2(d) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of the Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph shall be made in proportion to the respective amounts to be allocated to the Members pro rata in accordance with each Member’s Ownership PercentageMember pursuant hereto.
(f) Member Partner Nonrecourse Deductions for any Allocation Fiscal Year of Nevada JV or other applicable period with respect to a Partner Nonrecourse Debt shall be specially allocated 100% to the Member Members that bears bear the economic risk of loss with respect to the Member for such Partner Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section (as determined under Sections 1.704-2(i2(b)(4) and 1.704-2(i)(1) of the Treasury Regulations.). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset of Nevada JV, pursuant to Code Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital AccountsAccounts as the result of a distribution to a Member in complete liquidation of such Member’s interest in Nevada JV, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall be specially allocated to the Members in a manner consistent accordance with their interests in Nevada JV in the manner in which their Capital Accounts are required to be adjusted pursuant to such event Regulations Section of the Treasury Regulations.
(i1.704-1(b)(2)(iv)(m)(2) Notwithstanding any other provision of this Section 8.03applies, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, or to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated Member to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of whom such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected distribution was made in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in event Regulations Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1(b)(2)(iv)(m)(4) applies.
Appears in 2 contracts
Sources: Implementation Agreement (Barrick Gold Corp), Implementation Agreement (Newmont Mining Corp /De/)
Special Allocations. Notwithstanding any other provisions of this Section 6.1, the following special allocations shall be made on a Series by Series basis in the following order for each taxable period:
(ai) If Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Minimum Gain attributable to a Series during any Allocation Yeartaxable year, each Member Partner of such Series shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j)(2)(i). For purposes of this Section 6.1(b), each Partner’s Adjusted Capital Account balance for such Series shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Section 6.1 with respect to such taxable year. This Section 8.03(a6.1(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(46.1 (other than Section 6.1(b)(i) above), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain attributable to a Series during any Allocation Yeartaxable year, any Member Partner with a share of Member such Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable year shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2)(ii). For purposes of this Section 6.1(b), or each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any successor provisionsother allocations pursuant to this Section 6.1, other than Section 6.1(b)(i) above, with respect to such taxable year. This Section 8.03(b6.1(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 6.1(b)(i) and 6.1(b)(ii) above, in the event any Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) attributable to a Series, items of income and gain of such Series shall be allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in its Adjusted Capital Account attributable to such Series created by such adjustment, allocation or distribution as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 6.1(b)(i), 6.1(b)(ii), 6.1(b)(iv) or 6.1(b)(v). This Section 6.1(b)(iii) is intended to constitute a qualified income offset described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) After giving effect to the allocations in Sections 6.1(b)(i), 6.1(b)(ii) and 6.1(b)(iii):
(A) in the event that the Series LH Partners become obligated to make payments to the Series AC Partners pursuant to Section 6.2(c), items of Partnership gross income and gain shall be allocated to the Series LH Partners in accordance with their respective Series LH Percentage Interests until the aggregate amounts of items allocated to the Series LH Partners pursuant to this Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the cumulative amount of payments made by the Series LH Partners to the Series AC Partners pursuant to Section 6.2(c) for such taxable year and all prior taxable years; and
(B) in the event that the Series AC Partners become obligated to make payments to the Series LH Partners pursuant to Section 6.3(c), items of Partnership gross income and gain shall be allocated to the Series AC Partners in accordance with their respective Series AC Percentage Interests until the aggregate amounts of items allocated to the Series AC Partners pursuant to this Section 6.1(b)(iv) for such taxable year and all prior taxable years equals the cumulative amount of payments made by the Series AC Partners to the Series LH Partners pursuant to Section 6.3(c) for such taxable year and all prior taxable years.
(v) In the event any Member Partner has a deficit balance in its Adjusted Capital Account attributable to a Series at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable year, such Member Partner shall be specially allocated items of Company gross income and gain of such Series in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c6.1(b)(v) shall be made only if and to the extent that such Member Partner would have an a deficit balance in its Adjusted Capital Account Deficit for such Series after all other allocations provided for in this Article VIII Section 6.1(b) (other than Section 6.1(b)(iii)) have been tentatively made as if Section 6.1(b)(iii) and this Section 8.03(c6.1(b)(v) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(evi) Nonrecourse Deductions attributable to a Series for any Allocation Year taxable year shall be allocated to the Members pro rata Partners of such Series in accordance with each Member’s Ownership Percentagetheir Percentage Interests for such Series.
(fvii) Member Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for any Allocation Year taxable year shall be allocated 100% to the Member Partner that bears the economic risk Economic Risk of loss Loss with respect to the Member Partner Nonrecourse Debt to which such Member Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member Partner bears the economic risk Economic Risk of loss Loss with respect to a Member Partner Nonrecourse Debt, such Member Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Members Partners in accordance with the ratios in which they share such economic risk Economic Risk of loss.
(gLoss. This Section 6.1(b)(vii) For purposes is intended to comply with the provisions of Treasury Regulation Section 1.7521.704-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company 2(i) and shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentageinterpreted consistently therewith.
(hviii) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital AccountsAccounts as a result of a distribution in liquidation of a Partner’s Partnership Interest in a Series, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Series Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulationsprovisions.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Enbridge Energy Partners Lp), Contribution Agreement (Enbridge Energy Partners Lp)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(b), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(b) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(b)(vi) and 6.1(b)(vii)). This Section 8.03(a6.1(b)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(b)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(b), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(b), other than Section 6.1(b)(i), Sections 6.1(b)(vi) and 6.1(b)(vii), with respect to such taxable period. This Section 8.03(b6.1(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement, Limited Partnership Agreement (Emerge Energy Services LP)
Special Allocations. (a) If there is a net decrease in Company Minimum Gain during Notwithstanding any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the other provisions of this Agreement and (B) Section 5.4, the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) following special allocations shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.each taxable period:
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(ei) Nonrecourse Deductions for any Allocation Year taxable year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentagetheir respective Units held.
(fii) Member Nonrecourse Deductions for any Allocation Year taxable year shall be allocated 100% to the Member that bears the economic risk Economic Risk of loss Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk Economic Risk of loss Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk Economic Risk of loss.
(gLoss. This Section 5.4(c)(ii) For purposes is intended to comply with the provisions of Treasury Regulation Section 1.7521.704-3(a)(3)2(i) and shall be interpreted consistently therewith.
(iii) Notwithstanding any other provision of this Section 6.2, the Members agree that Nonrecourse Liabilities of the Company if there is a net decrease in Minimum Gain during any taxable year, each Member shall be allocated items of Company income and gain for such year (and, if necessary, subsequent taxable years) in the Members pro rata manner and amounts provided in accordance with Treasury Regulation Sections 1.704-2(f)(6), (g)(2) and (j)(2)(i). For purposes of this Section 5.4(c), each Member’s Ownership PercentageCapital Account shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.4 with respect to such taxable year. This Section 5.4(c)(iii) is intended to comply with the partner minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(hiv) Notwithstanding the other provisions of this Section 6.2 (other than Section 6.2(c)(iii) above), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any taxable year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such taxable year shall be allocated items of Company income and gain for such year (and, if necessary, subsequent taxable years) in the manner and amounts provided in Treasury Regulation Section 1.704-2(i)(4) and (j)(2)(ii). For purposes of this Section 5.4(c), each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.4, other than Section 5.4(c)(iii) above, with respect to such taxable year. This Section 5.4(c)(iv) is intended to comply with the partner nonrecourse debt minimum gain chargeback requirement in Treasury Regulation Section 1.704 2(i)(4) and shall be interpreted consistently therewith.
(v) Except as provided in Sections 5.4(c)(iii) and 5.4(c)(iv) above, in the event any Member unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in its Adjusted Capital Account created by such adjustment, allocation or distribution as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 5.4(c)(iii), 5.4(c)(iv) or 5.4(c)(vi).
(vi) In the event any Member has a deficit balance in its Adjusted Capital Account at the end of any taxable year, such Member shall be allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 5.4(c)(vi) shall be made only if and to the extent that such Member would have a deficit balance in its Adjusted Capital Account after all other allocations provided in this Section 5.4(c) (other than Section 5.4(c)(v)) have been tentatively made as if Section 5.4(c)(v) and this Section 5.4(c)(vi) were not in this Agreement.
(vii) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital AccountsAccounts as a result of a distribution in liquidation of a Member’s Interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulationsprovisions.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Operating Agreement, Operating Agreement (FMC Technologies Inc)
Special Allocations. (a) Loss attributable to Partner Nonrecourse Debt shall be allocated in the manner required by Regulations Section 1.704-2(i). If there is a net decrease during a taxable year in Company Partner Minimum Gain during any Allocation YearGain, each Member shall be allocated items of Company income and gain Income for such Allocation Year taxable year (and, if necessary, for subsequent Allocation Yearstaxable years) shall be allocated to the Limited Partners in the manner amounts and amounts provided in Treasury Regulation Sections of such character as is determined according to Regulations Section 1.704-2(f)(62(i)(4), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a5.2(a) is intended to comply be a “partner nonrecourse debt minimum gain chargeback” provision that complies with the Company Minimum Gain chargeback requirement in Treasury Regulation requirements of Regulations Section 1.704-2(f) 2(i)(4), and shall be interpreted consistently in a manner consistent therewith.
(b) Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(45.2(a), if there is a net decrease in Member Nonrecourse Debt Partnership Minimum Gain during any Allocation Yeartaxable year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year each Limited Partner shall be allocated items of Company income and gain Income for such Allocation Year taxable year (and, if necessary, for subsequent Allocation Yearstaxable years) in the manner amounts and amounts provided in Treasury Regulation Sections of such character as is determined according to Regulations Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(f), or any successor provisions. This Section 8.03(b5.2(b) is intended to comply be a “minimum gain chargeback” provision that complies with the chargeback requirements of items of income and gain requirement in Treasury Regulation Regulations Section 1.704-2(i)(4) 2(f), and shall be interpreted consistently in a manner consistent therewith.
(c) In the event If any Member has a deficit balance Limited Partner that unexpectedly receives an adjustment, allocation or distribution described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections Regulations Section 1.704-2(g) and 1.704-2(i)(51(b)(2)(ii)(d)(4), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c(5) shall be made only if and to the extent that such Member would have or (6) has an Adjusted Capital Account Deficit as of the end of any taxable year, computed after all the application of Section 5.2(a) and Section 5.2(b) but before the application of any other allocations provided provision of Section 5.1 and Section 5.2, then Income for such taxable year shall be allocated to such Limited Partner in this Article VIII have been tentatively made an amount and manner sufficient to eliminate such Adjusted Capital Account Deficit as if this quickly as possible. This Section 8.03(c5.2(c) were not is intended to be a “qualified income offset” provision as described in this AgreementRegulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.
(d) In the event any Member has a deficit balance Income and Loss described in its Capital Account at the end of any Allocation Year in excess clause (d) of the sum definition of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year Gross Asset Value shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their that the adjustments to the Capital Accounts are required to be adjusted made pursuant to such Regulations Section of the Treasury Regulations1.704-1(b)(2)(iv)(m).
(ie) Notwithstanding any other provision of this Section 8.03, the The allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (fSection 5.2(a) and (hthrough Section 5.2(d) inclusive (the “Required Regulatory Allocations”) are intended to comply with certain requirements of Section 1.704-1(b) and 1.704-2 of the Regulations. The Regulatory Allocations may not be consistent with the manner in which the Limited Partners intend to allocate Income and Loss of the Partnership or to make Distributions. Accordingly, notwithstanding the other provisions of Sections 5.1 and 5.2, but subject to the Regulatory Allocations, items of Income and Loss of the Partnership shall be taken into account allocated among the Limited Partners so as to eliminate the effect of the Regulatory Allocations and thereby cause the respective Capital Account balances of the Limited Partners to be in the amounts (or as close thereto as possible) they would have been if Income and Loss had been allocated without reference to the Regulatory Allocations. In general, the Limited Partners anticipate that this shall be accomplished by specially allocating other Income and Loss among the Limited Partners so that, to the extent possible, the net amount of items of gross income, gain, loss Regulatory Allocations and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated special allocations to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madeLimited Partner is zero.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Advantage Solutions Inc.), Limited Partnership Agreement (Epicor International Holdings, Inc.)
Special Allocations. (a) If Notwithstanding any provision of Sections 4.7 to the contrary, no allocation of Company losses shall be made to a Member if it would cause the Member to have an Adjusted Capital Account Deficit. Allocations of Company losses that would be made to a Member but for this Section 4.8(a) shall instead be made to other Members pursuant to Section 4.7 to the extent not inconsistent with this Section 4.8(a).
(b) Notwithstanding anything herein to the contrary, in the event any Member unexpectedly receives any adjustments, allocations or distributions described in paragraphs (b)(2)(ii)(d)(4), (5) or (6) of Treasury Regulations Section 1.704-1, there shall be specially allocated to such Member such items of Company income and gain, at such times and in such amounts as will eliminate as quickly as possible that portion of any deficit in its Capital Account caused or increased by such adjustments, allocations or distributions.
(c) Notwithstanding any other provision of this Article IV, if there is a net decrease in Company Minimum Gain minimum gain or Member nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulation Sections 1.704-2(d) and 1.704-2(i)) during any Allocation YearCompany taxable year, each Member the Members shall be allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended an amount equal to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a their respective shares of such net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yearsuch year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore determined pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member . The items to be so allocated shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable determined in accordance with Treasury Regulation Section 1.704-2(i2(f). If more than one Member bears This paragraph (c) is intended to comply with the economic risk minimum gain chargeback requirements in such Treasury Regulations and shall be interpreted consistently therewith, including that no chargeback shall be required to the extent of the exceptions provided in Treasury Regulation Sections 1.704-2(f) and 1.704-2(i)(4).
(d) To the extent permitted by the Code and the Treasury Regulations thereunder, any special allocations of items of income or gain pursuant to Section 4.8(a), Section 4.8(b) or Section 4.8(c) shall be taken into account in computing subsequent allocations of Company income or loss with respect pursuant to a Member Nonrecourse DebtSection 4.7 so that the net amount allocated to the Members pursuant to this Section 4.8 shall, to the extent possible, be equal to the net amounts that would have been allocated to each such Member Nonrecourse Deductions pursuant to the provisions of Section 4.7 if the allocations pursuant to Section 4.8(a), Section 4.8(b) and Section 4.8(c) had not occurred.
(e) If any Interest in the Company is Transferred or otherwise adjusted during any Fiscal Period in compliance with the provisions of this Agreement, each item of income, gain, loss, expense, deduction and credit and all other items attributable thereto to such Interest for such period shall be divided and allocated between or among the transferor Member and the transferee Member by taking into account their varying Interests during such Members period in accordance with Section 706(d) of the ratios in which they share Code, using any conventions permitted by law and approved by the affected Members. All distributions on or before the date of such economic risk of lossTransfer shall be made to the transferor Member, and all distributions thereafter shall be made to the transferee Member.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(hf) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) of the Code is required, required pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such that adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basisthe basis of the asset), and such item of gain or loss shall be specially allocated to the Members in a the manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the that Treasury RegulationsRegulation.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Aveon Group L.P.), Limited Liability Company Agreement (Aveon Group L.P.)
Special Allocations. (ai) If there is a net decrease Notwithstanding any other provision of this Agreement, (i) “partner nonrecourse deductions” (as defined in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f2(i) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4of the Regulations), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yearany, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year Partnership shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member Partner that bears the economic risk of loss with respect to within the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation meaning of Section 1.704-2(i). If more than one Member bears ) of the economic risk Regulations, and (ii) “nonrecourse deductions” (as defined in Section 1.704-2(b) of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members the Regulations) and “excess nonrecourse liabilities” (as defined in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3) of the Regulations), the Members agree that Nonrecourse Liabilities if any, of the Company Partnership with respect to each period shall be allocated among the Members pro rata Partners in accordance with each Member’s Ownership Percentagetheir respective Percentage Interests.
(hii) This Agreement shall be deemed to include “qualified income offset,” “minimum gain chargeback” and “partner nonrecourse debt minimum gain chargeback” provisions within the meaning of the Regulations under Section 704(b) of the Code. Accordingly, notwithstanding any other provision of this Agreement, items of gross income shall be allocated to the Partners on a priority basis to the extent and in the manner required by such provisions.
(iii) Notwithstanding any other provision of this Agreement, no allocation of Losses or items of deduction or expense shall be made to any Partner to the extent that the effect of such allocation would be to cause the Partner to have a negative balance in its Capital Account, after taking into account any adjustments, allocations or distributions described in Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Regulations, in excess of the maximum amount of such negative balance such Partner would be obligated (or deemed obligated under the Regulations) to contribute to the Partnership upon liquidation.
(iv) To the extent that an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)) of the Regulations, to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section section of the Treasury Regulations.
(iv) Notwithstanding If the interest of any other provision Partner in the Partnership changes during a taxable year the principles of this Section 8.03, 706 of the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) Code and (h) (the “Required Allocations”) Regulations thereunder shall be taken into account so thatapplied, as reasonably determined by the Designated Partner, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of account for such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madechange.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Partnership Agreement (NorthStar/RXR New York Metro Real Estate, Inc.), Partnership Agreement (NorthStar/RXR New York Metro Real Estate, Inc.)
Special Allocations. Before any allocations are made pursuant to Section 6.1, Section 6.2 or Section 14 (a) If there is a net decrease in Company Minimum Gain during any Allocation Yearas such Sections may be modified by Section 6.5), each Member the following special allocations shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) made in the manner following order:
6.3.1 The Manager may make such special allocations, and amounts provided in Treasury Regulation apply Sections 1.704-2(f)(6)6.1 and 6.2 with such modifications, 1.704-2(g)(2as it determines to be appropriate (i) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement rules set forth in the Treasury Regulation Regulations under Section 1.704-2(f704(b) of the Code governing (a) allocations of "nonrecourse deductions," "partner nonrecourse deductions" and shall be interpreted consistently therewith.
other items lacking "economic effect" and (b) Except as provided in "minimum gain chargebacks" and "partner nonrecourse debt minimum gain chargebacks," and (ii) for this Agreement to contain a "qualified income offset" provision within the meaning of the Treasury Regulation Regulations under Section 1.704-2(i)(4)704(b) of the Code. In no event, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during however, shall any Allocation Year, such special allocations or modifications affect the amount or timing of any distribution to be made to any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewithhereunder.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) 6.3.2 To the extent an adjustment to the adjusted tax basis of any asset of the Company asset pursuant to Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)l(b)(2)(iv)(m) of the Treasury Regulations, to be taken into account in determining Capital Accountscapital accounts, the amount of such adjustment to the Capital Accounts capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basisthe basis of the asset), and such item of gain or loss shall be specially allocated to the Members in a manner that is consistent with the manner in which their Capital Accounts capital accounts are required to be adjusted pursuant to such Section 1.704-l(b)(2)(iv)(m) of the Treasury Regulations.
6.3.3 To the extent that any portion of the Management Fee payment is determined by the Manager to be a distribution to any Member and not a guaranteed payment within the meaning of Section 707(c) of the Code (i) Notwithstanding any other provision of this Section 8.03, the allocations set forth or a payment for services provided in Sections 8.03(aa non-Member capacity), an amount of gross income of the Company equal to the amount of such payment (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thatand, to the extent possible, of the net amount same character as the income of the Company giving rise to such payment) shall be specially allocated to such Member.
6.3.4 There shall be specially allocated to the Class A Member all fees and expenses of the Company related to the Fund B Escrow Account.
6.3.5 For any fiscal year or other accounting period of the Company, there shall be specially allocated to the Class C Member its share of any fees and expenses related to Funded Securities as provided in Section 9.4 and such other items of gross Company income, gain, loss and deduction attributable to Funded Securities as are necessary for its Adjusted Capital Account Balance to equal, to the extent possible, its Target Capital Account Balance as of the close of such fiscal year or other accounting period. The items allocated to each the Class C Member pursuant to Sections 8.02 and 8.03, together, this Section 6.3.5 shall be equal to drawn from all of the net amount of such Company's items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated attributable to Funded Securities in a manner that will cause, to is fair and equitable and consistent with the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts distributions to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05made to, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications expenses to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulationsborne by, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this AgreementClass C Member hereunder.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Comdisco Holding Co Inc), Limited Liability Company Agreement (Comdisco Holding Co Inc)
Special Allocations. (a) If Notwithstanding any other provision of this Agreement, the following allocations shall be made for each Fiscal Year or other period:
(i) Notwithstanding any other provision of this Section 7.04, if there is a net decrease in Company Minimum Gain during any Allocation Yeartaxable period, each Member shall be allocated items of Company income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections Treas. Reg. § 1.704-2(f)(62(f), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j). For purposes of this Section 7.04, each Member’s Capital Account shall be determined and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Article 6 with respect to such taxable period. This Section 8.03(a7.04(a)(i) is intended to comply with the Company Minimum Gain partnership minimum gain chargeback requirement in Treasury Regulation Section Treas. Reg. § 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(47.04 (other than 7.04(a)(i) above), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yeartaxable period, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections Treas. Reg. § 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2). For purposes of this Section 7.04, each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 7.04(a), or any successor provisionsother than Section 7.04(a)(i) above, with respect to such taxable period. This Section 8.03(b7.04(a)(ii) is intended to comply with the Member nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section Treas. Reg. § 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 7.04(a)(i) and 7.04(a)(ii) above, in the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulations, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 7.04(a)(i) and 7.04(a)(ii).
(iv) In the event any Member has a deficit balance in its Adjusted Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable period, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c7.04(a)(iv) shall be made only if and to the extent that such Member would have an a deficit balance in its Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII Section 7.04(a) have been tentatively made as if this Section 8.03(c7.04(a)(iv) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(ev) Nonrecourse Deductions for any Allocation Year taxable period shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentagetheir Percentage Interests.
(fvi) Member Nonrecourse Deductions for any Allocation Year taxable period shall be allocated 100% to the Member that bears the economic risk Economic Risk of loss Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section Treas. Reg. § 1.704-2(i). If more than one Member bears the economic risk Economic Risk of loss Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk Economic Risk of lossLoss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (First Wind Holdings Inc.), Limited Liability Company Agreement (First Wind Holdings Inc.)
Special Allocations. (ai) If there the Partnership incurs any item of loss or deduction, where the Partnership is a net decrease in Company Minimum Gain during any Allocation Yearentitled to indemnification pursuant to Section 9.2 of the Master Formation and Equity Interest Purchase Agreement for such loss or deduction, each Member then the item of loss or deduction shall be allocated items to SG (if the item of Company income loss or deduction is attributable to the US Business) or shall be allocated to SETI (if the item of loss or deduction is attributable to the Non-US Business).
(ii) Any deduction arising from the amortization or impairment of any goodwill, up to an amount equal to $350,000,000, shall be allocated fifty percent (50%) to SG and gain for such Allocation Year fifty percent (and, if necessary, subsequent Allocation Years50%) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2to RBS.
(iii) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) Clause 11 is intended to comply with Section 704(b) of the Company Minimum Gain chargeback requirement in Code and the Treasury Regulation Regulations thereunder, including the “alternative test for economic effect” under Treasury Regulations Section 1.704-2(f1(b)(ii)(d). Notwithstanding Clause 11.3.2, the Partnership shall make any allocations required by such Treasury Regulations, including “qualified income offset” and “minimum gain chargeback” allocations and allocations relating to any nonrecourse debt of the Partnership, prior to making the allocations set forth in Clause 11.3.2 or in Clause 11.3.3(i) and shall be interpreted consistently therewithor (ii).
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(civ) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Fiscal Year which is in excess of the sum of (Aa) the amount such Member is required obligated to restore restore, if any, pursuant to the provisions any provision of this Agreement and (Bb) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections Regulations Section 1.704-2(g2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(cClause 11.3.3(iv) shall be made only if and to the extent that such a Member would have an Adjusted a deficit Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII Clause 11 have been tentatively made as if the second sentence in Clause 11.3.3(iii) and this Section 8.03(cClause 11.3.3(iv) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Liability Partnership Agreement, Limited Liability Partnership Agreement (Sempra Energy)
Special Allocations. (a) Loss attributable to Member Nonrecourse Debt shall be allocated in the manner required by Regulations Section 1.704-2(i). If there is a net decrease during a taxable year in Member Minimum Gain, Income for such taxable year (and, if necessary, for subsequent taxable years) shall be allocated to the Members in the amounts and of such character as is determined according to Regulations Section 1.704-2(i)(4). This Section 4.2(a) is intended to be a “partner nonrecourse debt minimum gain chargeback” provision that complies with the requirements of Regulations Section 1.704-2(i)(4), and shall be interpreted in a manner consistent therewith.
(b) Except as otherwise provided in Section 4.2(a), if there is a net decrease in Company Minimum Gain during any Allocation Yeartaxable year, each Member shall be allocated items of Company income and gain Income for such Allocation Year taxable year (and, if necessary, for subsequent Allocation Yearstaxable years) in the manner amounts and amounts provided in Treasury Regulation Sections of such character as is determined according to Regulations Section 1.704-2(f)(62(f), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a4.2(b) is intended to comply be a “minimum gain chargeback” provision that complies with the Company Minimum Gain chargeback requirement in Treasury Regulation requirements of Regulations Section 1.704-2(f) ), and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently consistent therewith.
(c) In the event If any Member has a deficit balance that unexpectedly receives an adjustment, allocation or distribution described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections Regulations Section 1.704-2(g) and 1.704-2(i)(51(b)(2)(ii)(d)(4), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c(5) shall be made only if and to the extent that such Member would have or (6) has an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at of the end of any Allocation Year in excess taxable year, computed after the application of Section 4.2(a) and Section 4.2(b) but before the sum application of (A) the amount any other provision of Section 4.1, Section 4.2 and Section 4.3, then Income for such taxable year shall be allocated to such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)in proportion to, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that of, such Member would have an Adjusted Capital Account Deficit after all other allocations provided for Deficit. This Section 4.2(c) is intended to be a “qualified income offset” provision as described in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto 1(b)(2)(ii)(d) and shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members interpreted in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulationstherewith.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 2 contracts
Sources: Limited Liability Company Agreement (Malibu Boats, Inc.), Limited Liability Company Agreement (Malibu Boats, Inc.)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.69 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.69.1 through 1.1.69.5.
Appears in 2 contracts
Sources: Limited Partnership Agreement (Brookfield Infrastructure Partners L.P.), Limited Partnership Agreement (Brookfield Infrastructure Partners L.P.)
Special Allocations. For purposes of the following provisions of this Section 3.2, the Clorox Partners will be regarded as a single JV Partner with a single Capital Account. Notwithstanding anything contained herein to the contrary:
(a) If a JV Partner would at any time receive, but for this Section 3.2(a), an allocation of deduction, loss, or expenditure that would cause or increase a deficit balance in such JV Partner's Capital Account in excess of any amount of such deficit balance that the JV Partner is obligated to restore or deemed obligated to restore (as determined in accordance with Treasury Regulation Section 1.704-1(b)(2)(ii)(c)), then the portion of such allocation that would cause or increase such deficit Capital Account balance will be specially allocated to the other JV Partners, if any, with positive Capital Account balances in proportion to such balances. The loss limitation under this Section 3.2(a) is intended to comply with Treasury Regulation Section 1.704-1(b)(2)(ii)(d), including the reductions described in subparagraphs (4), (5) and (6) therein.
(b) If in any Fiscal Year a JV Partner receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Joint Venture income and gain will be specially allocated to each such JV Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Capital Account deficit of such JV Partner as quickly as possible provided that an allocation pursuant to this Section 3.2(b) will be made only if and to the extent that such JV Partner would have a Capital Account deficit after all other allocations provided for in this Article III have been tentatively made as if this Section 3.2(b) were not in the Agreement. This Section 3.2(b) is intended to qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and will be interpreted consistently therewith. THE PORTIONS OF THIS AGREEMENT IDENTIFIED BY THE SYMBOL “[* * *]” HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
(c) If there is a net decrease in Company Minimum Gain minimum gain attributed to the Joint Venture or JV Partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulation Sections 1.704-2(d) and 1.704-2(i)) during any Allocation YearJoint Venture taxable year, each Member shall the JV Partners will be allocated items of Company income and gain attributed to the Joint Venture for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended an amount equal to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a their respective shares of such net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yearsuch year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore determined pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall . The items to be specially so allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall will be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable determined in accordance with Treasury Regulation Section 1.704-2(i2(f). If more than one Member bears the economic risk of loss with respect This Section 3.2(c) is intended to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance comply with the ratios minimum gain chargeback requirements in which they share such economic risk Treasury Regulations and will be interpreted consistently therewith, including that no chargeback will be required to the extent of lossthe exceptions provided in Treasury Regulation Sections 1.704-2(f) and 1.704-2(i)(4).
(gd) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations The allocation provisions set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, Article III and the other provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions Accounts are intended to comply with Treasury Regulations Sections Regulation Section 1.704-1 1(b) and 1.704-2 and shall will be interpreted and applied in a manner consistent with such Treasury Regulations Regulations; provided however that such provisions will not affect the economic rights of any JV Partner, including rights to distributions with respect to the Joint Venture.
(e) Any special allocations of items of income, gain, loss or deductions pursuant to Sections 3.2(a), (b) and (c) will be taken into account in computing subsequent allocations pursuant to Section 3.1 and this Section 3.2, so that the net amount of any amendment items so allocated will, to the extent possible, be equal to the net amount that would have been allocated to each such JV Partner pursuant to the provisions of this Article III if such special allocations had not occurred.
(f) In the event that any fees, interest, or successor provision theretoother amounts paid to any JV Partner or any Affiliate thereof pursuant to this Agreement or any other agreement attributed to the Joint Venture with any JV Partner or Affiliate thereof providing for the payment of such amount, and deducted by the Joint Venture in reliance on Section 707(a) and/or 707(c) of the Code, are disallowed as deductions to the Joint Venture on its federal income tax return and are treated as Joint Venture distributions, then:
(i) the Net Profits or Net Loss, as the case may be, for the Fiscal Year in which such fees, interest, or other amounts were paid will be increased or decreased, as the case may be, by the amount of such fees, interest, or other amounts that are treated as Joint Venture distributions; and
(ii) there will be allocated to the JV Partner to which (or to whose Affiliate) such fees, interest, or other amounts were paid, prior to the allocations pursuant to Section 3.1, an amount of gross income for the Fiscal Year equal to the amount of such fees, interest, or other amounts that are treated as Joint Venture distributions.
(g) Prior to the allocation of Net Profits and Net Losses pursuant to Section 3.1, the following allocations shall be made for each Fiscal Year:
(i) The holder of the Class A Interest will be specially allocated royalty THE PORTIONS OF THIS AGREEMENT IDENTIFIED BY THE SYMBOL “[* * *]” HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. income attributable to royalty payments made under the Glad License Agreements for such Fiscal Year in an amount of royalty payments [* * *] to the aggregate amounts distributable to the holder of the Class A Interest under Section 3.5(b)(i) hereof (without regard to distributions treated as guaranteed payments under such Section) in each Fiscal Quarter in such Fiscal Year. Royalty income allocated to the Class A Interest hereunder will be allocated among the various sources of such royalty income in the same manner as withholding taxes are calculated under the definition of “Deemed Withholding Taxes”. The Members shall cause appropriate modifications holder of the Class A Interest will also be specially allocated income for such Fiscal Year in an [* * *] of the IP Allocation Amounts with respect to IP Acquisitions for such Fiscal Year and will be specially allocated all income attributable to Glad License Termination Amounts paid for such Fiscal Year;
(ii) After the allocations pursuant to Section 3.2(g)(i) are made, the holder of the Class B Interest will be specially allocated royalty income attributable to royalty payments made under the Glad License Agreements for such Fiscal Year in an amount [* * *] royalty payments received under the Glad License Agreements for such Fiscal Year, [* * *] the amount of royalty income allocated to the Class A Interest under Section 3.2(g)(i) for such Fiscal Year. The holder of the Class B Interest will also be specially allocated income for such Fiscal Year [* * *] IP Acquisition Prices with respect to IP Acquisitions, if unanticipated events might otherwise cause this Agreement not to comply with any, for such Treasury Regulations, so long as such modifications do not cause a material change Fiscal Year in excess of the aggregate IP Allocation Amounts included in the relative economic benefit calculation of the Members Class A Special Amount and the Class C Special Amount for each Fiscal Quarter in such Fiscal Year;
(iii) The holder of the Class C Interest will be specially allocated royalty income attributable to royalty payments made under this Agreementthe JV Sublicense Agreements in such Fiscal Year in an amount of royalty payments [* * *] royalty payments received under the JV Sublicense Agreements for such Fiscal Year. The holder of the Class C Interest will also be specially allocated income for such Fiscal Year in an amount [* * *] of the IP Allocation Amounts with respect to IP Acquisitions for such Fiscal Year and will be specially allocated [* * *] attributable to JV Sublicense Termination Amounts paid for such Fiscal Year;
(iv) The Clorox Partners will be specially allocated all deductions arising from the payment of guaranteed payments pursuant to Section 3.5(a) and Section 3.5(b) hereof in such Fiscal Year and shall be specially allocated [* * *] attributable to Prohibited License Amounts received on behalf of the Joint Venture in such Fiscal Year; and
(v) Each JV Partner will be specially allocated all deductions arising from the amortization of organizational expenses (within the meaning of Section 709(b) of the Code) incurred by such JV Partner on behalf of the Joint Venture.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision in this Article V: (a) Minimum Gain Chargeback. If there is a net decrease in Company Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any Allocation YearPartnership taxable year, each Member the Partners shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in the manner and amounts provided in an amount equal to their respective shares of such net decrease during such year, determined pursuant to Treasury Regulation Regulations Sections 1.704-2(f)(6), 1.704-2(g)(21.704- 2(g) and 1.704-2(j)(2)(i2(i)(5), or any successor provision. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). This Section 8.03(a5.05
(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement requirements in such Treasury Regulation Section 1.704-2(f) Regulations Sections and shall be interpreted consistently therewith.
(b) Except as ; including that no chargeback shall be required to the extent of the exceptions provided in Treasury Regulation Section Regulations Sections 1.704-2(f) and 1.704-2(i)(4). -31- (b) Qualified Income Offset. If any Partner unexpectedly receives any adjustments, if there is a net decrease allocations, or distributions described in Member Nonrecourse Debt Minimum Gain during any Allocation YearTreasury Regulations Section 1.704- 1(b)(2)(ii)(d)(4), any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated (5) or (6), items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income to such Partner in an amount and gain manner sufficient to eliminate the deficit balance in the amount of such excess Partner’s Adjusted Capital Account Balance created by such adjustments, allocations or distributions as quickly promptly as possible; provided, provided that an allocation pursuant to this Section 8.03(c5.05(b) shall be made only if and to the extent that such Member a Partner would have an a deficit Adjusted Capital Account Deficit Balance in excess of such sum after all other allocations provided for in this Article VIII V have been tentatively made as if this Section 8.03(c5.05(b) were not in this Agreement.
(d. This Section 5.05(b) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 the “qualified income offset” requirement of the Code and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreementconsistently therewith.
Appears in 1 contract
Sources: Limited Partnership Agreement (Brookfield Oaktree Holdings, LLC)
Special Allocations. Notwithstanding any provisions of paragraph 1 of this Appendix II, the following special allocations shall be made.
(a) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year Chargeback (and, if necessary, subsequent Allocation Years) in the manner and amounts Nonrecourse Liabilities). Except as otherwise provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4)of the Regulations, if there is a net decrease in Member Nonrecourse Debt Partnership Minimum Gain during for any Allocation YearPartnership fiscal year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year each Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to such Partner's share of the manner and amounts provided net decrease in Treasury Regulation Partnership Minimum Gain to the extent required by Regulations Section 1.704-2(f). The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(42(f) and 1.704-2(j)(2)(ii), or any successor provisions(j)(2) of the Regulations. This Section 8.03(bsubparagraph 2
(a) is intended to comply with the minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph 2(a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto.
(cb) In Partner Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of the event Regulations, if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Member fiscal year, each Partner who has a deficit balance in its Capital Account at the end of any Allocation Year in excess share of the sum Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704- 2(i)(5) of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)Regulations, such Member shall be specially allocated items of Company gross Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in the amount Partner Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in the manner required by Section 1.704-2(i) of such excess as quickly as possible; provided, that an allocation the Regulations. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2) of the Regulations. This subparagraph 2
(b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this Section 8.03(csubparagraph 2(b) shall be made only if and in proportion to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is respective amounts required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership PercentagePartner pursuant hereto.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Mission West Properties Inc)
Special Allocations. (a) If there is a net decrease in Company Minimum Gain during Notwithstanding any Allocation Yearother provision of this Agreement, each Member no Net Losses or item of expense, loss or deduction shall be allocated to the Limited Partner to the extent such an allocation would cause or increase a deficit balance standing in such Partner’s Adjusted Capital Account and any such Net Losses shall instead be allocated one hundred percent (100%) to the General Partner. In addition, items of Company income and gain shall be specially allocated to the Partners in accordance with and to the extent required by the qualified income offset provisions set forth in Treasury Regulation Section 1.704-1(b)(2)(ii)(d). Notwithstanding any other provision in this Article IV, (i) any and all “partnership nonrecourse deductions” (as defined in Treasury Regulation Section 1.704-2(b)(1)) of the Partnership for any Fiscal Year or other period shall be allocated one hundred percent (100%) to the Limited Partner; (ii) any and all “partner nonrecourse deductions” (as such term is defined in Treasury Regulation Section 1.704-2(i)(2)) attributable to any “partner nonrecourse debt” (as such term is defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to the Partner that bears the “economic risk of loss” (as determined under Treasury Regulation Section 1.752-2) for such Allocation Year “partner nonrecourse debt” in accordance with Treasury Regulation Section 1.704-2(i)(1); (and, if necessary, subsequent Allocation Yearsiii) each Partner shall be specially allocated items of Partnership income and gain in accordance with the manner and amounts provided partnership minimum gain chargeback requirements set forth in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
1,704-2(g); and (biv) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member each Partner with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year minimum gain attributable to any “partner nonrecourse debt” shall be specially allocated items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in accordance with the manner and amounts provided in partner minimum gain chargeback requirements of Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(5), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income Any and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in all “excess nonrecourse liabilities” of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess Partnership as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of determined under Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company ) shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
one hundred percent (h100%) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury RegulationsLimited Partner.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Maracay Homes, L.L.C.)
Special Allocations. The following special allocations shall be made in the following order:
(a) If In the event that there is a net decrease during a Partnership Fiscal Year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article IV, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended order to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation conform to Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.2;
(b) Except as provided in Treasury Regulation Subject to Section 1.704-2(i)(4)4.3(a) of this LP Agreement, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article IV, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the "qualified income offset" requirement in Treasury Regulation of Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.1(b)(2)(ii)(d)(3);
(c) In the event any Member that a Partner has a an deficit balance in its Capital Account balance at the end of any Allocation Partnership Fiscal Year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this LP Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g1.704- 2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain in the an amount of such excess as quickly as possible; provided, provided that an any allocation pursuant to under this Section 8.03(c4.3(c) shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII IV have been tentatively made as if this Section 8.03(c4.3(c) were not in this Agreement.;
(d) In the event any Member has a deficit balance in its Capital Account at the end Any item of any Allocation Year in excess of the sum of (A) the amount such Member Partnership loss or expense that is required attributable to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Partner Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which they share the economic risk of loss (as defined in Regulations Section 1.752-2) for such Partner Nonrecourse Debt. Each Nonrecourse Deduction of the Partnership shall be specially allocated among the Partners in proportion to their Capital Accounts are required to be adjusted Percentage Interests. The allocations pursuant to such Section of the Treasury Regulations.
4.3 (i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(aa), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”c) shall be taken into account so that, to comprised of a proportionate share of each of the extent possible, the net amount of Partnership's items of gross income, income and gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Weatherford International Inc /New/)
Special Allocations. Notwithstanding any other provision of this Section 5.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 5.1(d)(vi) and 5.1(d)(vii)). This Section 8.03(a5.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.1 (other than Section 5.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d), other than Section 5.1(d)(i) and other than an allocation pursuant to Sections 5.1(d)(vi) and 5.1(d)(vii), with respect to such taxable period. This Section 8.03(b5.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. Notwithstanding any other provision in this Agreement to the contrary, in the event any Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section I .704-l(b)(2)(ii)(d)(4), (a5) If there is a net decrease in Company Minimum Gain during any Allocation Yearor (6) with respect to such Partner's Capital Account that causes or increases an Adjusted Capital Account Deficit with respect to such Partner, each Member shall be allocated items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income to each such Partner in an amount and gain in manner sufficient to eliminate, to the amount extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such excess Partner as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(cprovision (d) shall be made only if and to the extent that such Member Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII Section 19 have been tentatively made as if this Section 8.03(cprovision (d) were not in this Agreement.
. This Section 19(d) is intended to constitute a "qualified income offset" within the meaning of Treasury Regulations Section 1.704-1 (db)(2)(ii)(d) In the event any Member has a deficit balance in its and shall be interpreted consistently therewith. "Adjusted Capital Account at Deficit" means, with respect to any Partner, the deficit balance, if any, in such Partner's Capital Account as of the end of the relevant Fiscal Period, after giving effect to the following adjustments: (a) credit to such Capital Account any Allocation Year in excess of the sum of (A) the amount amounts that such Member Partner is required obligated to restore or is deemed to be obligated to restore pursuant to the provisions Treasury Regulations under Section 704 of this Agreement the Code and (Bb) debit to such Capital Account the amount such Member is deemed obligated to restore pursuant to items described in Treasury Regulation Regulations Sections 1.7041 .704-2(gl(b)(2)(ii)(d)(4), (5) and 1.704-2(i)(5(6), such Member shall be specially allocated items . The foregoing definition of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with the provisions of Treasury Regulations Sections Section 1.704-1 and 1.704-2 (b)(2)(ii)(d) and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreementconsistently therewith.
Appears in 1 contract
Sources: Partnership Agreement
Special Allocations. The following special allocations will be made in following order and priority:
(a) If there is a net decrease in Company Partnership Minimum Gain during any Allocation Yearfiscal year, each Member shall Partner will be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in proportion to, and to the manner and amounts provided extent of, an amount equal to such Partner's share of the net decrease in Treasury Regulation Sections 1.704-2(f)(6), Partnership Minimum Gain determined in accordance with Regulations Section 1.704-2(g)(2) and ). The items to be allocated will be determined in accordance with Regulations Section 1.704-2(j)(2)(i2(f), or any successor provision. This Section 8.03(aThis
(a) is intended to comply with such Sections of the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) Regulations and shall will be interpreted consistently therewith.
(b) The allocations otherwise required pursuant to Section 4.3(a) hereof will not apply to a Partner to the extent that: (i) such Partner's share of the net decrease in Partnership Minimum Gain is caused by a guaranty, refinancing or other change in the instrument evidencing a nonrecourse debt of the Partnership which causes such debt to become a partially or wholly recourse debt or a Partner Nonrecourse Debt, and such Partner bears the economic risk of loss (within the meaning of Regulations Section 1.752-2) for such changed debt; (ii) such Partner's share of the net decrease in Partnership Minimum Gain results from the repayment of a nonrecourse liability of the Partnership, which repayment is made using funds contributed by such Partner to the capital of the Partnership; (iii) the Service, pursuant to Regulations Section 1.704-2(f)(4), waives the requirement of such allocation in response to a request for such waiver made by the Managing Partner on behalf of the Partnership (which request the Managing Partner may or may not make, in their discretion, if it determines that the Partnership would be eligible therefor); or (iv) additional exceptions to the requirement of such allocation are established by revenue rulings issued by the Internal Revenue Service pursuant to Regulations Section 1.704-2(f)(5), which exceptions apply to such Partner, as determined by the Managing Partner in its discretion.
(c) Except as provided in Treasury Regulation Section 1.704-2(i)(4)4.3(a) hereof, if there is a net decrease in Member Partner Minimum Gain attributable to Partner Nonrecourse Debt Minimum Gain during any Allocation Yearfiscal year, any Member determined in accordance with Regulations Section 1.704- 2(i)(3), then, except as provided in Regulations Section 1.704-2(i)(4), each Partner who has a share of Member Nonrecourse Debt the Partner Minimum Gain at the beginning of attributable to such Allocation Year shall Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704- 2(i)(5), will be allocated items of Company income and gain for such Allocation Year fiscal year (and, if necessary, subsequent Allocation Yearsfiscal years) equal to such Partner's share of the net decrease in the manner and amounts provided Partner Minimum Gain. The items to be allocated will be determined in Treasury Regulation Sections accordance with Regulations Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(j)(2), or any successor provisions. This Section 8.03(b4.3(c) is intended to comply with Regulations Section 1.704-2(i) and will be applied and interpreted in accordance with such regulation.
(d) Any item of Partnership loss, deduction or expenditure under Code Section 705(a)(2)(b) attributable to Partner Nonrecourse Debt will be allocated in accordance with Regulations Section 1.704-2(i) to the chargeback Partner who bears the economic risk of loss for such debt.
(e) In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in
Section 1. 704-1(b)(2)(ii)(d)(4), (5) or (6) resulting in an Adjusted Capital Account Deficit for such Partner, items of income and gain requirement will be specially allocated to such Partner in Treasury Regulation any amount and manner sufficient to eliminate, to the extent required by the Regulations, such Adjusted Capital Account Deficit as quickly as possible. The items to be allocated will be determined in accordance with Regulations Section 1.704-2(i)(41(b)(2)(ii)(d)(6). This Section 4.3(e) is intended to comply with Regulations Section 1.704- 1(b)(2)(ii)(d) and shall will be applied and interpreted consistently therewithin accordance with such regulation.
(cf) No items of loss or deduction will be allocated to any Partner to the extent that any such allocation would cause the Partner to have an, or increase the amount of an existing, Adjusted Capital Account deficit at the end of any Fiscal Year. All items of loss or deduction in excess of the limitation set forth in this Section 4.3(f) will be allocated among such other Partners, which have positive Adjusted Capital Account balances, pro rata, in proportion to such Adjusted Capital Account balances, until each Partner's positive Adjusted Capital Account balance is reduced to zero. Thereafter , any remaining items of loss or deduction will be allocated to the Partners, pro rata, in proportion to their relative aggregate Capital Contributions.
(g) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Year in excess of the sum of (A) the amount fiscal year, each such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall Partner will be specially allocated items of Company gross Partnership income and gain in the amount (consisting of such excess a pro rata portion of each item of Partnership income and gain) as quickly as possible; providedpossible to eliminate such Adjusted Capital Account Deficit, provided that an allocation pursuant to this Section 8.03(c4.3(g) shall will be made only if and only to the extent that such Member Partner would have an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII IV have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentagemade.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset Property pursuant to Section Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall will be specially allocated to among the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Partnership Agreement (Brookdale Living Communities Inc)
Special Allocations. Notwithstanding any other provision of this Agreement: (ai) If a Member shall not be allocated under this Section 7.1(c) items of loss and deduction of the Company to the extent such an allocation would cause or increase a deficit balance in such Member’s Capital Account (in excess of any limited dollar amount of such deficit balance that such Member is obligated to restore consistent with the Treasury Regulations for the safe harbor for Section 704(b), including under the Treasury Regulations applicable to Company nonrecourse and recourse loans) as of the end of the allocation period to which such allocation relates; (ii) there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items to the Members such gains or income as shall be necessary to satisfy the “qualified income offset” requirement of Treasury Regulation Section 1.704- 1(b)(2)(ii)(d); (iii) with respect to any Company income and recourse debt or a loan made by a Member to the Company, deductions attributable to such debt or loan within the meaning of Treasury Regulation Section 1.704-2(i)(2) shall be allocated to the Member(s) who bear the economic risk of such debt or loan; (iv) this Agreement incorporates the “minimum gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided chargeback” provisions set forth in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4g) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and “partner nonrecourse debt minimum gain requirement chargeback” set forth in Treasury Regulation Section 1.704-2(i)(4) and (which shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance apply as provided in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement those regulations); and (Bv) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be any allocations made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b7.1(d)(i) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”ii) shall be taken into account in allocating items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated such allocations to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member if such allocations under Section 8.02 and Section 8.03 7.1(d)(i) or (ii) had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madeoccurred.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Operating Agreement
Special Allocations. (a) If there is a net decrease in Company Minimum Gain during any Allocation Fiscal Year, each Member shall be allocated items of Company income and the minimum gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided chargeback provisions described in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section Regulations § 1.704-2(f) and (g) shall be interpreted consistently therewithapply.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if If there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Fiscal Year, any the partner minimum gain chargeback provisions described in Treasury Regulations § 1.704-2(i) shall apply.
(c) If a Member with unexpectedly receives an adjustment, allocation, or Distribution described in Treasury Regulations § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), which adjustment, allocation, or distribution creates or increases a share of Member deficit balance in that Member’s [Adjusted] Capital Account, the “qualified income offset” provisions described in Treasury Regulations § 1.704-1(b)(2)(ii)(d) shall apply.
(d) Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year Deductions shall be allocated items of Company income and gain for such Allocation Year to the Members in proportion to their respective Percentages.
(and, if necessary, subsequent Allocation Yearse) in Member Nonrecourse Deductions shall be allocated to the manner and amounts provided in Members as required by Treasury Regulation Sections Regulations § 1.704-2(i)(42(i)(1).
(f) and 1.704-2(j)(2)(ii), or any successor provisions. This The special allocations in this Section 8.03(b) is 6.4 are intended to comply with certain requirements of the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) Regulations and shall be interpreted consistently therewith.
(c) In the event . The Members intend that any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an special allocation pursuant to this Section 8.03(c) 6.4 shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all offset with other special allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) 6.4. Accordingly, special allocations of income, gain, loss, or deduction shall be made only if and to in such manner that, in the extent that such Member would have an Adjusted Capital Account Deficit after all other reasonable determination of Manager, taking into account likely future allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and under this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with 6.4, after such allocations are made, each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thatAccount is, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that Capital Account it would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and were this Section 8.03(i) 6.4 not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items part of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Kennedy-Wilson Properties (IL))
Special Allocations. Notwithstanding the foregoing, the allocations provided in this Article 5 shall be subject to the following exceptions:
(a) If This Agreement is intended to comply with the safe harbor provisions set forth in Treasury Regulations Sections 1.704-1(b) and 1.704-2(i), and the allocations set forth in paragraph 5.2(b) (“Regulatory Allocations”) are intended to comply with certain requirements of such Treasury Regulations. In the event that the Regulatory Allocations result in allocations being made that are inconsistent with paragraph 5.1, the Managing Member may adjust subsequent allocations of any items of income, gain, loss, expense and dedication such that the net amount of the Regulatory Allocations and such subsequent special adjustments to each Member equal $0.00.
(b) The following Regulatory Allocations shall be made in the following order:
(i) Except as otherwise provided in Treasury Regulations Section
1. 704-2(f), notwithstanding any other provision of this Article 5, if there is a net decrease in Company Minimum Gain the Fund’s “partnership minimum gain” (as defined in Treasury Regulations Section 1.704-2(b)(2) and 1.704-2(d)(1)) during any Allocation YearAccounting Period, each Member shall be specially allocated items of Company the Fund’s income and gain for such Allocation Year Accounting Period (and, if necessary, subsequent Allocation YearsAccounting Periods) in an amount equal to such Member’s share of the manner and amounts provided net decrease in partnership minimum gain, determined in accordance with Treasury Regulation Sections 1.704-2(f)(6Regulations Section 1.704- 2(g)(2), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(aparagraph 5.2(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as otherwise provided in Treasury Regulation Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article 5, if there is a net decrease in Member Nonrecourse Debt Minimum Gain “partner nonrecourse debt minimum gain” (as defined in Treasury Regulations Section 1.704- 2(i)(2)) attributable to a “partner nonrecourse debt” (as defined in Treasury Regulations Section 1.704-2(b)(4)) during any Allocation YearAccounting Period, any each Member with who has a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year partner recourse debt minimum gain attributable to such partner nonrecourse debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company the Fund’s income and gain for such Allocation Year (Accounting Period and, if necessary, subsequent Allocation Years) Accounting Periods, in an amount equal to such Member’s share of the manner and amounts provided net decrease in such partner nonrecourse debt minimum gain, determined in accordance with Treasury Regulation Sections Regulations Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(bparagraph 5.2(b)(ii) is intended to comply with the minimum gain chargeback of items of income and gain requirement in Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) In the event any Member has a deficit balance unexpectedly receives any adjustments, allocations, or distributions described in its Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4) through (d)(6) which cause the Adjusted Capital Account at the end Balance of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)be reduced below $0.00, such Member shall be specially allocated items of Company gross Fund income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Members deficit in it Adjusted Capital Account Balance created by such adjustments, allocations, or distributions as quickly as possible. This paragraph 5.2(b)(iii) is intended to constitute a manner consistent with the manner “qualified income offset” as described in which their Capital Accounts are required to be adjusted pursuant to such Section 1.704- l(b)(2)(ii)(d) of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied consistently therewith.
(iv) If the allocation of Loss (or items of loss or deduction) to a Member as provided in a manner consistent with paragraph 5.1 hereof would create or increase an Adjusted Capital Account Balance deficit, then there shall be allocated to such Treasury Regulations and any amendment Member only that amount or successor provision theretoLoss (or items of loss or deduction) as will not create or increase an Adjusted Capital Account Balance deficit. The Loss (or other items of loss or deduction) that would, absent the application or the preceding sentence, otherwise be allocated to such Member shall be allocated to the other Members shall cause appropriate modifications in proportion to be made if unanticipated events might otherwise cause their relative positive Adjusted Capital Account Balances, subject to the limitations of this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreementparagraph (iv).
Appears in 1 contract
Sources: Limited Liability Company Agreement
Special Allocations. Notwithstanding any other provisions of this Section 6.1, thefollowing special allocations shall be made on a Series by Series basis in the following order foreach taxable period:
(ai) If Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Minimum Gain attributable to a Series during any Allocation Yeartaxable year, each Member of suchSeries shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j)(2)(i). For purposes of this Section 6.1(b), each Member’s Adjusted Capital Account balance for such Series shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Section
6.1 with respect to such taxable year. This Section 8.03(a6.1(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(46.1 (other than Section 6.1(b)(i) above), if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Series during any Allocation Yeartaxable year, any Member with a share of such Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable year shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(4)and (j)(2)(ii). For purposes of this Section 6.1(b), or each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any successor provisionsother allocations pursuant to this Section 6.1, other than Section 6.1(b)(i) above, with respect to such taxable year. This Section 8.03(b6.1(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 6.1(b)(i) and 6.1(b)(ii) above, in the event any Member unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) attributable to a Series, items of income and gain of such Series shall be allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, if any, in its Adjusted Capital Account attributable to such Series created by such adjustment, allocation or distribution as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 6.1(b)(i), 6.1(b)(ii), 6.1(b)(iv) or 6.1(b)(v). This Section 6.1(b)(iii) is intended to constitute a qualified income offset described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) In the event any Member has a deficit balance in its Adjusted Capital Account attributable to a Series at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable year, such Member shall be specially allocated items of Company gross income and gain of such Series in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c6.1(b)(iv) shall be made only if and to the extent that such Member would have an a deficit balance in its Adjusted Capital Account Deficit for such Series after all other allocations provided for in this Article VIII Section 6.1(b) (other than Section 6.1(b)(iii)) have been tentatively made as if Section 6.1(b)(iii) and this Section 8.03(c6.1(b)(iv) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(ev) Nonrecourse Deductions attributable to a Series for any Allocation Year taxable year shall be allocated to the Members pro rata of such Series in accordance with each Member’s Ownership Percentagetheir Percentage Interests for suchSeries.
(fvi) Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for any Allocation Year taxable year shall be allocated 100% to the Member that bears the economic risk Economic Risk of loss Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk Economic Risk of loss Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk Economic Risk of loss.
(gLoss. This Section 6.1(b)(vi) For purposes is intended to comply with the provisions of Treasury Regulation Section 1.7521.704-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company 2(i) and shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentageinterpreted consistently therewith.
(hvii) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section pursuantto Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1.704- 1(b)(2)(iv)(m), to be taken into account in determining Capital AccountsAccounts as a result of a distribution in liquidation of a Member’s Interest in a Series, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts CapitalAccounts are required to be adjusted pursuant to such Section of the Treasury Regulationsprovisions.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Liability Company Agreement
Special Allocations. Items in the Nature of Income or Gain.
(a) The General Partner and Special Limited Partner shall each be allocated income in each year in an amount equal to any distributions received pursuant to Section 9.1(a).
(b) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and the Partnership’s minimum gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement as defined in Treasury Regulation Section 1.704-2(f1(b) and (4) (iv) (c)) during any taxable year, any Partner or Partners with negative Capital Account balances at the end of such year, shall be allocated income or gain in an amount equal to the sum of such deficits. Such amount shall be allocated among the Partners with negative Capital Account balances in the proportion each Partner’s negative Capital Account balance bears to the sum of all such Partners’ negative Capital Account balances. For purposes of this Section 9.4(b) each Partner’s Capital Account shall be increased by any amount such Partner is obligated to restore, or deemed obligated to restore under Treasury Regulation 1.704-1(b)(4)(iv), upon liquidation. The allocations under this Section 9.4(b) shall be interpreted consistently therewithin a manner to conform with Treasury Regulation Section 1.704-1(b)(4)(iv).
(bc) Except If a Partner’s Capital Account is reduced below the amount he is obligated to restore, or deemed obligated to restore under Treasury Regulation Section 1.704-1(b)(4)(iv), upon liquidation by: (i) the allocation of loss or deduction to him under Code Section 706(d), (ii) the allocation of loss or deduction to him under Treasury Regulation Section 1.751-1(b)(2)(ii) or (iii) distributions to him, he shall be allocated, as provided quickly as possible, items of Partnership income and gain equal to the amount by which his Capital Account is so reduced. For purposes of this Section 9.4(c) each Partner’s Capital Account shall be reduced for the items described in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year 1(b) (and, if necessary, subsequent Allocation Years2) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4(ii) (d) (4) (5) and 1.704-2(j)(2)(ii(6), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and Such allocation shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to conform with Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(51(b)(2)(ii)(d), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance Partners unexpectedly receive any adjustments, allocations, or distributions described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections Section 1.704-2(g) and 1(b)(2)(ii)(d)(5), or 1.704-2(i)(51(b) (2) (ii) (d) (6), such Member items of Partnership income and gain shall be specially allocated items of Company gross income to such Partners in an amount and gain manner sufficient to eliminate the deficit balances in the amount of their Capital Accounts created by such excess adjustments, allocations, or distributions as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year In the event there are special allocations of items of income or gain pursuant to Sections 9.4(b)-(d), there shall be allocated to the Members pro rata a special allocation of items of income and gain in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thatsucceeding years, to the extent possible, so that the net amount of any items of gross income, gain, loss so allocated and deduction the Profits and Losses and all other items allocated to each Member pursuant Partner shall, to Sections 8.02 and 8.03the extent possible, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Partner if no allocations had been made pursuant to Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made9.4(b)-(d).
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (HEALTHSOUTH of Toms River, Inc.)
Special Allocations.
(a) If Notwithstanding anything else contained in this Article VII, if any Partner has an Adjusted Capital Account Deficit for any fiscal period as a result of any adjustment of the type described in Regulations Section 1.704-1(b)(2)(ii)(d)(4) through (6), then the Partnership’s income and gain will be specially allocated to such Partner in an amount and manner sufficient to eliminate such deficit as quickly as possible. Any special allocation of items of income or gain pursuant to this paragraph is taken into account in computing subsequent allocations pursuant to this Article VII so that the cumulative net amount of all items allocated to each Partner is, to the extent possible, equal to the amount that would have been allocated to such Partner if there had never been any allocation pursuant to this paragraph (a).
(b) Net losses allocated pursuant to this Article VII will not exceed the maximum amount of net losses that can be so allocated without causing any Partner to have an, or to increase an existing, Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Limited Partners would have an Adjusted Capital Account Deficit as a consequence of an allocation of net losses pursuant to this Article VII, the limitation set forth in this paragraph will be applied on a Partner-by-Partner basis so as to allocate the maximum permissible net losses to each Limited Partner under Section 1.704-1(b)(2)(ii)(d) of the Regulations. All net losses in excess of the limitation set forth in this paragraph will be allocated to the General Partner.
(c) Notwithstanding any other provision of this Article VII, if there is a net decrease in Company Minimum Gain partnership minimum gain during any Allocation Fiscal Year, each Member shall Partner will be specially allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in proportion to, and to the manner and amounts provided extent of, an amount equal to such Partner’s share of the net decrease in Treasury Regulation Sections partnership minimum gain, determined in accordance with Section 1.704-(2)(g)(2) of the Regulations. The items to be so allocated will be determined in accordance with Section 1.704-2(f)(6), 1.704-2(g)(22(f) and 1.704-2(j)(2)(i), or any successor provisionof the Regulations. This Section 8.03(a7.6(c) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) of the Regulations and shall will be interpreted consistently therewith.therewith.
(bd) Except as provided in Treasury Regulation Notwithstanding any other provision of this Article VII except Section 1.704-2(i)(47.6(c), if there is a net decrease in Member Nonrecourse Debt Minimum Gain partner minimum gain attributable to a partner nonrecourse debt during any Allocation Fiscal Year, any Member each Partner with a share of Member Nonrecourse Debt Minimum Gain at the beginning partner minimum gain attributable to such partner nonrecourse debt, determined in accordance with Section 1.704-2(i)(5) of such Allocation Year shall the Regulations, will be specially allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in proportion to, and to the manner and amounts provided extent of, an amount equal to such Partner’s share of the net decrease in Treasury Regulation Sections partner minimum gain attributable to such partner nonrecourse debt, determined in accordance with Section 1.704-2(i)(42(i)(5) and of the Regulations. The items to be so allocated will be determined in accordance with Section 1.704-2(j)(2)(ii), or any successor provisions2(i)(5) of the Regulations. This Section 8.03(b7.6(d) is intended to comply with the partner minimum gain chargeback requirement of items of income the Regulations and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall will be interpreted consistently therewith.
(ce) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Fiscal Year which is in excess of the sum of (Ai) the amount such Member Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation any provision of this Agreement, and (ii) the amount such Partner is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), each such Member shall Partner will be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c7.6(e) shall will be made only if and to the extent that such Member Partner would have an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII VII have been tentatively made as if this Section 8.03(c7.6(e) and Section 7.6(a) hereof were not in this Agreementthe Agreement.
(f) Nonrecourse deductions for any Fiscal Year or other period will be specially allocated to the Partners in accordance with their respective Capital Contribution Percentages.
(dg) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions Any partner nonrecourse deductions for any Allocation Fiscal Year shall or other period will be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that Partner who bears the economic risk of loss with respect to the Member Nonrecourse Debt partner nonrecourse debt to which such Member Nonrecourse Deductions partner nonrecourse deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset Partnership asset, pursuant to Code Section 734(b) or Code Section 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704- l(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)l(b)(2)(iv)(m)(4) of the Regulations, to be taken into account in determining Capital AccountsAccounts as the result of a distribution to a Partner in complete liquidation of such Partner’s Interest, the amount of such adjustment to the Capital Accounts shall will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall will be specially allocated to the Members Partners in a manner consistent accordance with their Interests in the manner in which their Capital Accounts are required to be adjusted pursuant to such event Section 1.704-l(b)(2)(iv)(m)(2) of the Treasury RegulationsRegulations applies, or to the Partner to whom such distribution was made in the event Section 1.704- l(b)(2)(iv)(m)(4) of the Regulations applies.
(i) The “Regulatory Allocations” consist of the allocations to a Partner (or its predecessor) under Sections 7.6(a), 7.6(b), 7.6(c), 7.6(d), 7.6(e), 7.6(f) and 7.6(g). Notwithstanding any other provision of this Section 8.03Article VII (other than the Regulatory Allocations), the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall Regulatory Allocations will be taken into account in allocating other items of income, gain, loss and deduction among the Partners so that, to the extent possible, the net amount of such allocations of other items of gross income, gain, loss and deduction allocated the Regulatory Allocations to each Member pursuant to Sections 8.02 and 8.03, together, shall Partner will be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 Partner if the Regulatory Allocations had not occurred. The General Partner will have reasonable discretion, with respect to each Fiscal Year, to (i) apply the Required Allocations and provisions of this Section 8.03(i7.6(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are whatever order is likely to offset other Required Allocations previously mademinimize the economic distortions that might otherwise result from the Regulatory Allocations, and (ii) divide all allocations pursuant to this Section 7.6(i) among the Partners in a manner that is likely to minimize such economic distortions.
(j) Items For the avoidance of doubt, allocations of items of income, gainexpense, gain and loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possibleare characterized consistently among all Partners unless, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Eventtax laws, if any property is distributed in kind, any unrealized income, gain, loss, rules and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distributionregulation or this Agreement require otherwise.
(k) The allocations in Section 8.02, this Section 8.03 Partners acknowledge and Section 8.05, agree that the Partnership is intended to be treated as a “partnership” and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely not as an association taxable as a corporation for U.S. federal income tax purposes (and any related federal, state and/or local income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto, as applicable. The Members General Partner shall not cause appropriate modifications the Partnership to elect to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long taxable as such modifications do not cause a material change an “association” or “corporation” or permit activities within its control that would result in the relative economic benefit Partnership being a “publicly traded partnership” within the meaning of Section 7704 of the Members under this AgreementCode.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. (a) Losses attributable to partner nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4)) shall be allocated in the manner required by Treasury Regulations Section 1.704-2(i). If there is a net decrease during a Fiscal Year in partner nomecourse debt minimum gain (as defined in Treasury Regulations Section 1.704-2(i)(3)), Profits for such Fiscal year (and, if necessary , for subsequent Fiscal Years) shall be allocated to the Members in the amounts and of such character as determined according to, and subject to the exceptions contained in, Treasury Regulations Section 1.704-2(i)(4).
(b) If there is a net decrease in Company Minimum Gain during any Allocation Fiscal Year, each Member shall be allocated items of Company income and gain Profits for such Allocation Fiscal Year (and, if necessary, for subsequent Allocation Fiscal Years) in the manner amounts and amounts provided in of such character as determined according to, and subject to the exceptions contained in, Treasury Regulation Sections Regulations Section 1.704-2(f)(62(f), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a4.3(b) is intended to comply be a minimum gain chargeback provision that complies with the Company Minimum Gain chargeback requirement in requirements of Treasury Regulation Regulations Section 1.704-2(f) ), and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently consistent therewith.
(c) In the event If any Member has a deficit balance that unexpectedly receives an adjustment, allocation, or distribution described in its Capital Account at the end of any Allocation Year in excess of the sum of Treasury Regulations Section 1.704-l(b)(2)(ii)(d)(4), (A5) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B6) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have has an Adjusted Capital Account Deficit as of the end of any Taxable Year, computed after all the application of Section 4.3(c) but before the application of any other allocations provided provision of this ARTICLE IV, then Profits for such Taxable Year shall be allocated to such Member in this Article VIII have been tentatively made proportion to, and to the extent of, such Adjusted Capital Account Deficit. This Section 4.3(c) is intended to be a qualified income offset prov1s10n as if this described in Treasury Regulations Section 8.03(c1.704-l(b)(2)(ii)(d) were not and shall be interpreted in this Agreementa manner consistent therewith.
(d) In The allocations set forth in Sections 4.3(a)-(c) (the event any Member has a deficit balance in its Capital Account at the end "Regulatory Allocations'") are intended to comply with certain requirements of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(gl(b) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities 1.704- 2 of the Company shall Treasury Regulations. The Regulatory Allocations may not be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their the Members intend to allocate Profit and Loss of the Company or make Company distributions. Accordingly , notwithstanding the other provisions of this ARTICLE IV, but subject to the Regulatory Allocations, income, gain, deduction, and loss shall be reallocated among the Members so as to eliminate the effect of the Regulatory Allocations and thereby cause the respective Capital Accounts are required of the Members to be adjusted pursuant in the amounts (or as close thereto as possible) they would have been if Profit and Loss (and such other items of income , gain , deduction, and loss) had been allocated without reference to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03Regulatory Allocations. In general, the allocations set forth in Sections 8.03(a)Members anticipate that this will be accomplished by specially allocating other Profit and Loss (and such other items of income , (b)gain, (c)deduction, (d), (e), (fand loss) and (h) (among the “Required Allocations”) shall be taken into account Members so that, to the extent possible, that the net amount of items of gross income, gain, loss the Regulatory Allocations and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated special allocations to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madeis zero.
(je) Items In the event it is finally determined that any Member realized taxable income from compensation for services in connection with the issuance of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal Units to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed Member in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in accordance with the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions terms of this Agreement relating where the Units were intended to the maintenance of Capital Accounts, apply solely constitute profits interests for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended , the Company shall specifically allocate to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner such Member the corresponding Company compensation deduction, if consistent with such Treasury Regulations the Code and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Liability Company Agreement
Special Allocations. Notwithstanding the foregoing provisions of this Article Six, the following allocations may apply:
(a) If Except as provided in Paragraphs 6.4(b) and 6.4(c) hereof, in the event any Partner unexpectedly receives any adjustments, allocations, or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), which create or increase an Adjusted Capital Account Deficit items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit created by such adjustments, allocations, or distributions as quickly as possible; provided that an allocation pursuant to this Paragraph 6.4(a) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit after all allocations provided for in this Article Six have been tentatively made as if this Paragraph 6.4(a) were not in this Agreement.
(b) Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding any other provision of this Article Six, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership fiscal year, each Member Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, for subsequent Allocation Yearsyears) in an amount equal to such Partner's Share of the net decrease in Partnership Minimum Gain, to the extent required and in the manner and amounts provided by Sections 1.704-2(g) of the Treasury Regulations. The items to be so allocated shall be determined in Treasury Regulation accordance with Regulations Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i2(j)(2), or any successor provision. This Section 8.03(aParagraph 6.4(b) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation minimum gain charge-back provision of Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(bc) Except as otherwise provided in Treasury Regulation Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article Six, if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Allocation YearPartnership fiscal year, any Member with each Partner who has a share of Member the Partner Nonrecourse Debt Minimum Gain at the beginning of attributable to such Allocation Year Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, for subsequent Allocation Yearsyears) in an amount equal to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, to the extent required and in the manner and amounts provided by Section 1.704-2(i)(4) of the Treasury Regulations. The items to be so allocated shall be determined in Treasury Regulation accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(2), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.Paragraph 6.4
Appears in 1 contract
Sources: Limited Partnership Agreement (Chateau Communities Inc)
Special Allocations. The following special allocations shall be made in the following order:
(a) If Any “nonrecourse deductions” shall be allocated among the Members in accordance with their Percentage Interests.
(b) For purposes of determining the Members’ respective shares of “excess nonrecourse liabilities” of the Company under Treasury Regulations Section 1.752-3, each Member’s “percentage interest in partnership profits” shall be equal to such Member’s Percentage Interest, except to the extent that the TMP, in consultation with the Company’s regular accountants, determines that a different (permissible) allocation is necessary to prevent any Member from recognizing taxable gain under Sections 752 and 731 of the Code.
(c) Except as otherwise provided in Section 1.704-2(f) of the Regulations, notwithstanding any other provision of this Article 10, if there is a net decrease in Company Minimum Gain “partnership minimum gain” during any Allocation YearCompany taxable year, each Member shall be specially allocated items of Company income and gain for such Allocation Year taxable year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to such Member’s share of the manner and net decrease in “partnership minimum gain,” determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts provided required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in Treasury Regulation accordance with Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision2(j)(2) of the Regulations. This Section 8.03(a10.6(c) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith.
(bd) Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(4)) of the Regulations, notwithstanding any other provision of this Article 10, if there is a net decrease in Member Nonrecourse Debt Minimum Gain “partner nonrecourse debt minimum gain” attributable to a “partner nonrecourse debt” during any Allocation YearCompany taxable year, any each Member with who has a share of Member Nonrecourse Debt Minimum Gain at the beginning “partner nonrecourse debt minimum gain” attributable to such “partner nonrecourse debt,” determined in accordance with Section 1.704-2(i)(5) of such Allocation Year the Regulations, shall be specially allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to such Member’s share of the manner and net decrease in “partner nonrecourse debt minimum gain” attributable to such “partner nonrecourse debt,” determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts provided required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in Treasury Regulation accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions2(j)(2) of the Regulations. This Section 8.03(b10.6(d) is intended to comply with the minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith.
(ce) In the event Any “partner nonrecourse deductions” for any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member taxable year shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that who bears the economic risk of loss with respect to the Member Nonrecourse Debt ‘partner nonrecourse debt” to which such Member Nonrecourse Deductions “partner nonrecourse deductions” are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(i2(i)(1). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(gf) For purposes of The allocation contained in this Section 10.6(f) is intended to be a “qualified income offset” as defined in Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset1(b)(2)(ii)(d) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such regulation. After giving effect to the other allocations set forth in this Section 10.6, items of gross income and gain shall be allocated to each Member in an amount and manner sufficient to eliminate, as quickly as possible, any deficit in such Member’s Adjusted Augmented Capital Account to the extent that such deficit is created or increased by any unexpected adjustments, allocations or distributions described in Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this AgreementRegulation Section 1.704-1(b)(2)(ii)(d)(4)-(6).
Appears in 1 contract
Sources: Operating Agreement (Bluerock Enhanced Multifamily Trust, Inc.)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for each taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(b), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(b) with respect to such taxable period (other than an allocation pursuant to Section 6.1(b)(vi) and Section 6.1(b)(vii)). This Section 8.03(a6.1(b)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.. NORTHERN TIER ENERGY LP FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(b)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(b), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(b), other than Section 6.1(b)(i) and other than an allocation pursuant to Section 6.1(b)(vi) and Section 6.1(b)(vii), with respect to such taxable period. This Section 8.03(b6.1(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Northern Tier Energy LP)
Special Allocations. The following special allocations shall be made in the following order:
(a) If In the event that there is a net decrease during a Limited Fiscal Year in Company either Limited Minimum Gain during or Member Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article III, each Member shall be allocated receive such special allocations of items of Company Limited income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended order to comply with the Company Minimum Gain chargeback requirement in Treasury conform to Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.2;
(b) Except as provided in Treasury Regulation Subject to Section 1.704-2(i)(43.5.2(a), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Section 3.5, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Members in a manner that complies with the "qualified income offset" requirement in Treasury of Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.1(b)(2)(ii)(d)(3);
(c) In the event any that a Member has a deficit balance in its Capital Account balance at the end of any Allocation Limited Fiscal Year which is in excess of the sum of (Ai) the amount such Member is required then obligated to restore pursuant to the provisions of this Agreement LLC Agreement, and (Bii) the amount such Member is then deemed to be obligated to restore pursuant to Treasury the penultimate sentences of Regulation Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member shall be specially allocated items of Company gross Limited income and gain in the an amount of such excess as quickly as possible; provided, provided that an any allocation pursuant to under this Section 8.03(c3.5.2(c) shall be made only if and to the extent that such a Member would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII Section 3.5 have been tentatively made as if this Section 8.03(c3.5.2(c) were not in this LLC Agreement.;
(d) In the event any Member has a deficit balance in its Capital Account at the end Any item of any Allocation Year in excess of the sum of (A) the amount such Member Limited loss or expense that is required attributable to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which they share the economic risk of loss (as defined in Regulation Section 1.752-2) for such Member Nonrecourse Debt. Each Nonrecourse Deduction of Limited shall be specially allocated among the Members in proportion to their Capital Accounts are required to be adjusted Percentage Interests. The allocations pursuant to such Section of the Treasury Regulations.
3.5.2 (i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(aa), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”c) shall be taken into account so that, to the extent possible, the net amount comprised of a proportionate share of each of Limited's items of gross income, income and gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Weatherford International Inc /New/)
Special Allocations. At the end of each Fiscal Year and notwithstanding any provision of Section 10.2, the following special allocations shall be made for both Capital Account and for federal income tax purposes unless otherwise provided:
(a) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply In accordance with the Company Minimum Gain chargeback requirement in ordering rules of Treasury Regulation Section 1.704-2(f) 2(j), items of gross income and realized gain first shall be interpreted consistently therewith.
(b) Except as provided allocated in an amount and in a manner that complies with the “chargeback” requirement of Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share the ‘qualified income offset” requirement of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) 1 (b)(2)(ii)(d), and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end “minimum gain chargeback” requirement of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections Section 1.704-2(g) and 1.7042(f). Further, any “partner non-2(i)(5), such Member shall be specially allocated items recourse deductions” within the meaning of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704Section 1 .704-2(g2(i)(2) and 1.704attributable to “partner non-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year recourse debt” shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that who bears the “economic risk of loss with respect to the Member Nonrecourse Debt to which loss” for such Member Nonrecourse Deductions are attributable debt in accordance with Treasury Regulation Section 1.704-2(i). Any losses in excess of the losses allowable to the Members pursuant to the Treasury Regulations promulgated under Code Section 704(b) shall first be allocated to the extent allowable hereunder to Members who are not precluded from receiving such allocations by the preceding provisions of this subparagraph (a), if any, and shall thereafter be allocated as provided in Section 10.2.
(b) If more than one Member bears a taxing authority ignores the economic risk characterization of loss with respect any amounts paid to a Member Nonrecourse Debt(or an Affiliate thereof) as salaries, management fees, commissions, interest or other compensation for services (“Compensation”), and refuses to treat such payments as either guaranteed payments within the meaning of Code Section 707(c) or payments made to such Member other than in such Member’s capacity as a “partner” within the meaning of Code Section 707(a), and such taxing authority ultimately treats such amounts paid to a Member (or an affiliate thereto) as a distribution to such Member for federal income tax purposes which reduces such Member’s Capital Account, then the Compensation shall be treated as an allocation of an item of income or gain of the Company to the recipient Member so that, consistent with the intent of the Members, the Compensation shall not be treated as a distribution which reduces the recipient Member’s Capital Account. Accordingly, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata first available items of Company income and gain (including in accordance with each Member’s Ownership Percentagea succeeding year) in an amount equal to the Compensation.
(hc) To If the extent an adjustment to Company owns (x) any property contributed by a Member that had a fair market value different from its adjusted basis for federal income tax purposes on the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) date of the Code is requiredcontribution, or (y) any property that has been revalued pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(mI (b)(2)(iv)(f), to be taken into account in determining then for federal income tax purposes only and not for Capital AccountsAccount purposes, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and or deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal with respect to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(kin accordance with Code Section 704(c) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating Treasury Regulations thereunder. Pursuant to the maintenance “traditional method” of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with making Code Section 704(c) allocations described in Treasury Regulations Sections Regulation Section § 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement3(b).
Appears in 1 contract
Sources: Limited Liability Company Agreement (Agl Resources Inc)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(c)(vi) and 6.1(c)(vii)). This Section 8.03(a6.1(c)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(c)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c) (other than Section 6.1(c)(i) and other than an allocation pursuant to Sections 6.1(c)(vi) and 6.1(c)(vii)), with respect to such taxable period. This Section 8.03(b6.1(c)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Special Allocations. 3.4.1. In the event the Limited Partners unexpectedly receive any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1 (a) b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to the Limited Partners in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the negative capital account created by such adjustments, allocations or distributions as quickly as possible. For purposes of the preceding sentence, Partners’ Capital Accounts shall be reduced for the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6). The provisions of this Section 3.4.1 are intended to comply with the requirements of Treasury Regulation Section 1.704-1(b), including any amendments or successor regulations thereto, and shall be so interpreted.
3.4.2. If there is a net decrease in Company Minimum Gain Partnership minimum gain as defined in Regulation Section 1.704-2(d) during any Allocation Yeara Partnership taxable year, then each Member shall Partner must be allocated items of Company income and gain for each year in an amount equal to such Allocation Year (and, if necessary, subsequent Allocation Years) Partner’s share of the net decrease in the manner and amounts provided in Treasury Partnership minimum gain as computed under Regulation Sections 1.704-2(f)(6), 1.704Section 1 .704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This The provisions of this Section 8.03(a) is 3.4.2 are intended to comply with the Company Minimum Gain chargeback requirement in Treasury requirements of Regulation Section 1.704-2(f) 2, including any amendments or successor regulations thereto, and shall be interpreted consistently therewithso interpreted.
(b) Except as provided 3.4.3. Notwithstanding any provision of this Article to the contrary, to the extent allocations of loss or deductions to a Limited Partner would cause such Limited Partner to have a negative Capital Account balance, or increase the negative balance in Treasury Regulation Section 1.704-2(i)(4)a Limited Partner’s Capital Account, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year loss or deduction shall be allocated items among those Limited Partners with positive Capital Account balances to the extent thereof and in proportion thereto, with any remaining loss or deduction being allocated to the General Partner. For the purposes of Company income this Section 3.4.3 distributions made prior to or contemporaneous with any allocation to a Limited Partner shall be reflected in such Partner’s Capital Account prior to making such allocation to such Partner, and gain for a Partner’s Capital Account shall be credited to the extent (i) such Allocation Year Partner is unconditionally obligated to make additional contributions to the Partnership; (and, if necessary, subsequent Allocation Yearsii) such Partner is unconditionally obligated to fund a deficit in the manner his Capital Account upon liquidation; and amounts provided in Treasury (iii) such Partner is deemed to be obligated to restore his Capital Account balance pursuant to Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g2(s)(1) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) 3.4.4. In no event shall the event any Member has a deficit balance General Partner’s interest in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in or credit be less than one percent (1%) of each such item at all times during the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit existence of the Members under this AgreementPartnership.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision of this Article 7 in order to comply with the Code and Regulations for allocations of income, gain, loss, and LIMITED PARTNERSHIP AGREEMENT deductions attributable to nonrecourse liabilities and Partnership allocations where Partners are not liable to restore deficit capital accounts, the following rules apply:
(a) If there is a net decrease in Company Minimum Gain partnership minimum gain during any Allocation Yearfiscal year or other period, each Member so that an allocation is required by the Code and Regulations (in particular, Section 1.704-2(f)(l) of the Regulations), items of partnership income and gain shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) to the Partners in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) to the extent required by the applicable provisions of the Code and 1.704-2(j)(2)(i), or any successor provisionRegulations. This Section 8.03(a) provision is intended to comply with be a minimum gain chargeback within the Company Minimum Gain chargeback requirement in Treasury Regulation meaning of Section 1.704-2(f1.704(2)(f) of the Regulations and shall be interpreted and applied consistently therewithwith Section 1.704(2)(f) of the Regulations.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if If there is a net decrease in Member Nonrecourse Debt Minimum Gain the minimum gain attributable to a Partner nonrecourse loan during any Allocation Yearfiscal year or other period, any Member so that an allocation is required by Section 1.704-2(i)(4) of the Regulations, a Partner with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year that partner nonrecourse debt minimum gain shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation extent required by Section 1.704-2(i)(4) and shall be interpreted consistently therewithof the Regulations.
(c) In the event If any Member has a deficit balance Partner unexpectedly receives an adjustment, allocation, or distribution described in its Capital Account at the end of any Allocation Year in excess Section 1.704-1(b)(2)(d) (4)-(6) of the sum Regulations, items of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement Partnership income and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member gain shall be specially allocated items to these Partners in an amount and manner sufficient to eliminate, to the extent required by the Regulations, any adjusted capital account deficit of Company gross income and gain in the amount of such excess these Partners as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c) paragraph shall be made only if if, and to the extent that such Member that, this Partner would have an Adjusted Capital Account Deficit adjusted capital account deficit after all other allocations which are provided for in this Article VIII 7 tentatively have been tentatively made as if this Section 8.03(c) paragraph were not in part of this Agreement.
(d) In the event any Member has a deficit balance Any Partner nonrecourse deductions as defined in its Capital Account at the end of any Allocation Year in excess Section 1.704-2(1)(2) of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year Regulations shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member Partner that bears the economic risk of loss with respect to the Member Nonrecourse Debt loan giving rise to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation this deduction within the meaning of Section 1.704-2(i). If more than one Member bears 1.704(2)(l)(2)(a) of the economic risk Regulations.
(e) For income tax purposes, any item of loss income, gain, loss, deduction, or credit with respect to any property (other than money) that has been contributed by a Member Nonrecourse DebtPartner to the capital of the Partnership and which is required to be allocated to Partners for income tax purposes under Section 704 of the Code so as to take into account the variation between the tax basis of this property and its value at the time of its contribution, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted Partners for income tax basis of any Company asset pursuant to purposes in the manner required by Section 734(b) or 743(b) 704 of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, and the amount corresponding Regulations. If and when the capital accounts of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts Partners are required to be adjusted pursuant to such Section 1.704(b)(2)(iv)(f) or (g) of the Treasury Regulations.
(i) Notwithstanding Regulations with respect to a revaluation of any other provision Partnership asset, subsequent allocations of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in deduction, including without limitation depreciation and deductions for cost recovery with respect to this asset, shall take into account any variation between the Capital Accounts previously then existing adjusted basis of this asset for federal income tax LIMITED PARTNERSHIP AGREEMENT OF CRIMSON CARDINAL, L.P. — Page 11 purposes and the value as adjusted of this asset, as this computation may be required under Section 704(b) of the Code and the principles of Section 704(b) of the Code.
(f) Nonrecourse losses shall be allocated among one hundredth of one percent (0.01%) to the Members as if there were a taxable disposition of that property for General Partner and ninety-nine and ninety-nine hundredths percent (99.99%) to the fair market value of that property on the date of distributionLimited Partners.
(kg) The Since the allocations described in Section 8.02, this Section 8.03 and Section 8.057.05 may effect results not consistent with the manner in which the Partners intend to divide Partnership distributions, the General Partner is authorized to divide other allocations of net profits, net losses, and other items among the provisions Partners so as to prevent the special allocations from distorting the manner in which distributions would be divided among the Partners under Article 8 of this Agreement relating except for the application of the special allocations under this Section 7.05. The General Partner shall have discretion to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and accomplish this result in any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a reasonable manner that is consistent with such Treasury Regulations Section 704 of the Code and any amendment or successor provision theretothe corresponding Regulations. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury RegulationsPartners, so long as such modifications do not cause a material change in the relative economic benefit by unanimous written consent of the Members Partners, may agree to make any election permitted by the Regulations under this AgreementSection 704 of the Code that may reduce or eliminate any special allocation that would otherwise be required.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. 3.4.1. In the event the Limited Partners unexpectedly receive any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1 (a) b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to the Limited Partners in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the negative capital account created by such adjustments, allocations or distributions as quickly as possible. For purposes of the preceding sentence, Partners' Capital Accounts shall be reduced for the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6). The provisions of this Section 3.4.1 are intended to comply with the requirements of Treasury Regulation Section 1.704-1(b), including any amendments or successor regulations thereto, and shall be so interpreted.
3.4.2. If there is a net decrease in Company Minimum Gain Partnership minimum gain as defined in Regulation Section 1.704-2(d) during any Allocation Yeara Partnership taxable year, then each Member shall Partner must be allocated items of Company income and gain for each year in an amount equal to such Allocation Year (and, if necessary, subsequent Allocation Years) Partner's share of the net decrease in the manner and amounts provided in Treasury Partnership minimum gain as computed under Regulation Sections 1.704-2(f)(6), 1.704Section 1 .704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This The provisions of this Section 8.03(a) is 3.4.2 are intended to comply with the Company Minimum Gain chargeback requirement in Treasury requirements of Regulation Section 1.704-2(f) 2, including any amendments or successor regulations thereto, and shall be interpreted consistently therewithso interpreted.
(b) Except as provided 3.4.3. Notwithstanding any provision of this Article to the contrary, to the extent allocations of loss or deductions to a Limited Partner would cause such Limited Partner to have a negative Capital Account balance, or increase the negative balance in Treasury Regulation Section 1.704-2(i)(4)a Limited Partner's Capital Account, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year loss or deduction shall be allocated items among those Limited Partners with positive Capital Account balances to the extent thereof and in proportion thereto, with any remaining loss or deduction being allocated to the General Partner. For the purposes of Company income this Section 3.4.3 distributions made prior to or contemporaneous with any allocation to a Limited Partner shall be reflected in such Partner's Capital Account prior to making such allocation to such Partner, and gain for a Partner's Capital Account shall be credited to the extent (i) such Allocation Year Partner is unconditionally obligated to make additional contributions to the Partnership; (and, if necessary, subsequent Allocation Yearsii) such Partner is unconditionally obligated to fund a deficit in the manner his Capital Account upon liquidation; and amounts provided in Treasury (iii) such Partner is deemed to be obligated to restore his Capital Account balance pursuant to Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g2(s)(1) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) 3.4.4. In no event shall the event any Member has a deficit balance General Partner's interest in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in or credit be less than one percent (1%) of each such item at all times during the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit existence of the Members under this AgreementPartnership.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Province Healthcare Co)
Special Allocations. (a) If there is a net decrease Notwithstanding any other provision of this Agreement, "partner nonrecourse deductions" (as defined in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(42(i)), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yearany, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year LLC shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that who bears the economic risk of loss with respect to the Member Nonrecourse Debt debt to which such Member Nonrecourse Deductions deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members and "nonrecourse deductions" (as defined in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Regulations Section 1.7521.704-3(a)(32(b)(1), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts LLC shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent accordance with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury RegulationsPercentage Interests.
(ib) Notwithstanding This Agreement shall be deemed to include "qualified income offset," "minimum gain chargeback" and "partner nonrecourse debt minimum gain chargeback" provisions within the meaning of the Regulations under Section 704(b) of the Code. Accordingly, notwithstanding any other provision of this Section 8.03Agreement, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected shall be allocated to the Members to the extent and in the Capital Accounts previously manner required by such provisions.
(c) Any allocations required to be made pursuant to Section 6.03(a) and Section 6.03(b) (the "Regulatory Allocations") (other than allocations, the effect of which are likely to be offset in the future by other special allocations) shall be taken into account, to the extent permitted by the Regulations, in computing subsequent allocations of income, gain, loss or deduction pursuant to Section 6.02 so that the net amount of any items so allocated and all other items allocated to such Member shall, to the extent possible, be equal to the amount that would have been allocated to each Member pursuant to Section 6.02 had such Regulatory Allocations under this Section 6.03 not occurred.
(d) Notwithstanding anything herein to the contrary, except as set forth in Section 5.02(b)(ii) for each Fiscal Year or part thereof, the LLC's allocable share of the Property Owner's items of income, gain, loss, and deduction (including its share of such items which are allocated to it from Third Avenue LLC and MM LLC) for such period shall be allocated among the NYSTRS Members and the Reckson Members in the following proportions:
(i) to the NYSTRS Members in an amount equal to the Property Owner's items of income, gain, loss, and deduction, which are allocated to all of the members of the Property Owner for such period, times the NYSTRS Members then Percentage Interest, and
(ii) the LLC's remaining allocable share of the Property Owner's items of income, gain, loss, and deduction for such period, to the Reckson Members in accordance with Section 6.02, as if there the NYSTRS Members were not then a taxable disposition Member of that property for the fair market value of that property on LLC. This Section 6.03(d) shall not apply in the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and year the provisions LLC liquidates if the suspension of this Agreement relating provision would permit the NYSTRS Members to receive an amount on liquidation of the LLC pursuant to Section 11.03 that reflects, to the maintenance of Capital Accountsextent possible, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply the amount it would have received had liquidating distributions been made in accordance with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this AgreementSection 6.05.
Appears in 1 contract
Sources: Operating Agreement (Reckson Associates Realty Corp)
Special Allocations. (a) If there is a net decrease i. Except as provided in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in this Agreement in the manner and amounts provided event any Partner unexpectedly received any adjustments, allocations, or distributions described in Treasury Regulation Sections 1.704-2(f)(6Section 1.704(b)(2)(ii)(d)(4), 1.704-2(g)(2) and 1.704-2(j)(2)(i1(b)(2)(ii)(d)(5), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f1(b)(2)(ii)(d)(6) of the Regulations, items of Partnership income and gain shall be interpreted consistently therewithspecially allocated to each such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as possible.
(b) ii. Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease this Agreement in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Year Partnership fiscal year that is in excess of the sum of (Ai) the amount such Member Partner is required obligated to restore (pursuant to the terms of such Partner's promissory note or otherwise) and (ii) the amount such Partner is deemed to be obligated to restore pursuant to the provisions penultimate sentence of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5Regulations Section 1.704•1(b)(4)(iv)(f), each such Member Partner shall be specially allocated items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided.
iii. Notwithstanding any other provisions of this Agreement, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member there is a net decrease in Partnership Minimum Gain during any Partnership fiscal year, each Partner who would otherwise have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member year shall be specially allocated items of Company gross Partnership income and gain for such year (and, if necessary, subsequent years) in the an amount of and manner sufficient to eliminate such excess Adjusted Capital Account Deficit as quickly as possible; provided, that an allocation pursuant . The items to this Section 8.03(d) be so allocated shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata determined in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(iI(b)(4)(iv)(e). If more than one Member bears This subparagraph (iii) is intended to comply with the economic risk minimum gain charge-back requirement in such section of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto the Regulations and shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of lossinterpreted consistently therewith.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) iv. To the extent an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Code Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m1 (b) (2)(iv)(m), to be taken into account in determining Capital Accountscapital accounts, the amount of such adjustment to the Capital Accounts capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain gains or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts capital accounts are required to be adjusted pursuant to such Section section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (American Gas & Technology LP)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This For purposes of this Section 8.03(a6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This
Section 6.1 (d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Rhino Resource Partners LP)
Special Allocations. Notwithstanding any other provision of this Section 5.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 5.1 (d)(v) and (vi)). This Section 8.03(a5.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.1 (other than Section 5.1(d) (i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d), other than Section 5.1(d)(i) and other than an allocation pursuant to Sections 5.1(d)(v) and (vi), with respect to such taxable period. This Section 8.03(b5.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.7041.7041-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Qualified Income Offset. In the event any Member has a deficit balance Partner unexpectedly receives any adjustments, allocations or distributions described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1(b)(2)(ii)(d)(4), 1.704-2(i)(51(b)(2)(ii)(d)(5), such Member shall be specially allocated or 1.704-1(b)(2)(ii)(d)(6), items of Company gross Partnership income and gain shall be specifically allocated to such Partner in an amount and manner sufficient to eliminate, to the amount extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such excess adjustments, allocations or distributions as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that unless such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset otherwise eliminated pursuant to Section 734(b5.1(d)(i) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m(ii), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Ferrellgas Finance Corp)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period: (ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
. 42 (bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-1.704- 2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
. (ciii) [Intentionally Deleted] (iv) Qualified Income Offset. In the event any Member has a deficit balance Partner unexpectedly receives any adjustments, allocations or distributions described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1(b)(2)(ii)(d)(4), 1.704-2(i)(51(b)(2)(ii)(d)(5), such Member shall be specially allocated or 1.704-1(b)(2)(ii)(d)(6), items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members such Partner in a an amount and manner consistent with the manner in which their Capital Accounts are required sufficient to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thateliminate, to the extent possiblerequired by the Treasury Regulations promulgated under Section 704(b) of the Code, the net amount of items of gross incomedeficit balance, gainif any, loss and deduction allocated to each Member in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i6.1(d)(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madeor 6.1(d)(ii).
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for each taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member HI-CRUSH PARTNERS LP SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Hi-Crush Partners LP)
Special Allocations. (a) Losses attributable to partner nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4)) shall be allocated in the manner required by Treasury Regulations Section 1.704-2(i). If there is a net decrease during a Fiscal Year in partner nonrecourse debt minimum gain (as defined in Treasury Regulations Section 1.704-2(i)(3)), Profits for such Fiscal year (and, if necessary, for subsequent Fiscal Years) shall be allocated to the Members in the amounts and of such character as determined according to, and subject to the exceptions contained in, Treasury Regulations Section 1.704-2(i)(4).
(b) If there is a net decrease in Company Minimum Gain during any Allocation Fiscal Year, each Member shall be allocated items of Company income and gain Profits for such Allocation Fiscal Year (and, if necessary, for subsequent Allocation Fiscal Years) in the manner amounts and amounts provided in of such character as determined according to, and subject to the exceptions contained in, Treasury Regulation Sections Regulations Section 1.704-2(f)(62(f), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a4.3(b) is intended to comply be a minimum gain chargeback provision that complies with the Company Minimum Gain chargeback requirement in requirements of Treasury Regulation Regulations Section 1.704-2(f) ), and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently consistent therewith.
(c) In the event If any Member has a deficit balance that unexpectedly receives an adjustment, allocation, or distribution described in its Capital Account at the end of any Allocation Year in excess of the sum of Treasury Regulations Section 1.704-l(b)(2)(ii)(d)(4), (A5) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B6) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have has an Adjusted Capital Account Deficit as of the end of any Taxable Year, computed after all the application of Section 4.3(c) but before the application of any other allocations provided provision of this ARTICLE IV, then Profits for such Taxable Year shall be allocated to such Member in this Article VIII have been tentatively made proportion to, and to the extent of, such Adjusted Capital Account Deficit. This Section 4.3(c) is intended to be a qualified income offset provision as if this described in Treasury Regulations Section 8.03(c1.704-l(b)(2)(ii)(d) were not and shall be interpreted in this Agreementa manner consistent therewith.
(d) In The allocations set forth in Sections 4.313.4.3(a) - (c) (the event any Member has a deficit balance in its Capital Account at the end “Regulatory Allocations’”) are intended to comply with certain requirements of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g1(b) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities 2 of the Company shall Treasury Regulations. The Regulatory Allocations may not be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required the Members intend to be adjusted pursuant to such Section allocate Profit and Loss of the Treasury Regulations.
(i) Notwithstanding any Company or make Company distributions. Accordingly, notwithstanding the other provision provisions of this Section 8.03ARTICLE IV, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, but subject to the extent possibleRegulatory Allocations, the net amount of items of gross income, gain, deduction, and loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal reallocated among the Members so as to eliminate the net amount effect of such items that the Regulatory Allocations and thereby cause the respective Capital Accounts of the Members to be in the amounts (or as close thereto as possible) they would have been allocated to each if Profit and Loss (and such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items items of income, gain, loss deduction, and deduction realized after, or in anticipation of, a Dissolution Event shall be loss) had been allocated in a manner that will cause, without reference to the extent possibleRegulatory Allocations. In general, the ratio Members anticipate that this will be accomplished by specially allocating other Profit and Loss (and such other items of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, lossdeduction, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated loss) among the Members as if there were a taxable disposition so that the net amount of that property for the fair market value of that property on the date of distributionRegulatory Allocations and such special allocations to each such Member is zero.
(ke) The allocations In the event it is finally determined that any Member realized taxable income from compensation for services in Section 8.02, this Section 8.03 and Section 8.05, and connection with the provisions issuance of Units to such Member in accordance with the terms of this Agreement relating where the Units were intended to the maintenance of Capital Accounts, apply solely constitute profits interests for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended , the Company shall specifically allocate to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner such Member the corresponding Company compensation deduction, if consistent with such Treasury Regulations the Code and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Special Allocations. Before any allocations are made pursuant to Section 6.1, Section 6.2 or Section 14 (a) If there is a net decrease in Company Minimum Gain during any Allocation Yearas such Sections may be modified by Section 6.5), each Member the following special allocations shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) made in the manner following order:
6.3.1 The Manager may make such special allocations, and amounts provided in Treasury Regulation apply Sections 1.704-2(f)(6)6.1 and 6.2 with such modifications, 1.704-2(g)(2as it determines to be appropriate (i) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement rules set forth in the Treasury Regulation Regulations under Section 1.704-2(f704(b) of the Code governing (a) allocations of “nonrecourse deductions,” “partner nonrecourse deductions” and shall be interpreted consistently therewith.
other items lacking “economic effect” and (b) Except as provided in “minimum gain chargebacks” and “partner nonrecourse debt minimum gain chargebacks,” and (ii) for this Agreement to contain a “qualified income offset” provision within the meaning of the Treasury Regulation Regulations under Section 1.704-2(i)(4)704(b) of the Code. In no event, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during however, shall any Allocation Year, such special allocations or modifications affect the amount or timing of any distribution to be made to any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewithhereunder.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) 6.3.2 To the extent an adjustment to the adjusted tax basis of any asset of the Company asset pursuant to Section 734(b) or Section 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m)l(b)(2)(iv)(m) of the Treasury Regulations, to be taken into account in determining Capital Accountscapital accounts, the amount of such adjustment to the Capital Accounts capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basisthe basis of the asset), and such item of gain or loss shall be specially allocated to the Members in a manner that is consistent with the manner in which their Capital Accounts capital accounts are required to be adjusted pursuant to such Section 1.704-l(b)(2)(iv)(m) of the Treasury Regulations.
6.3.3 To the extent that any portion of the Management Fee payment is determined by the Manager to be a distribution to any Member and not a guaranteed payment within the meaning of Section 707(c) of the Code (i) Notwithstanding any other provision of this Section 8.03, the allocations set forth or a payment for services provided in Sections 8.03(aa non-Member capacity), an amount of gross income of the Company equal to the amount of such payment (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so thatand, to the extent possible, of the net amount same character as the income of the Company giving rise to such payment) shall be specially allocated to such Member.
6.3.4 There shall be specially allocated to the Class A Member all fees and expenses of the Company related to the Fund B Escrow Account.
6.3.5 For any fiscal year or other accounting period of the Company, there shall be specially allocated to the Class C Member its share of any fees and expenses related to Funded Securities as provided in Section 9.4 and such other items of gross Company income, gain, loss and deduction attributable to Funded Securities as are necessary for its Adjusted Capital Account Balance to equal, to the extent possible, its Target Capital Account Balance as of the close of such fiscal year or other accounting period. The items allocated to each the Class C Member pursuant to Sections 8.02 and 8.03, together, this Section 6.3.5 shall be equal to drawn from all of the net amount of such Company’s items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated attributable to Funded Securities in a manner that will cause, to is fair and equitable and consistent with the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts distributions to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05made to, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications expenses to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulationsborne by, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this AgreementClass C Member hereunder.
Appears in 1 contract
Sources: Limited Liability Company Agreement (Comdisco Holding Co Inc)
Special Allocations. i. Except as provided in subparagraph (aiii) If there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Yearsthis Section 8.1(b) in the manner and amounts provided event any Partner unexpectedly received any adjustments, allocations, or distributions described in Treasury Regulation Sections 1.704-2(f)(6Section 1.704(b)(2)(ii)(d)(4), 1.704-2(g)(2) and 1.704-2(j)(2)(i1(b)(2)(ii)(d)(5), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f1(b)(2)(ii)(d)(6) of the Regulations, items of Partnership income and gain shall be interpreted consistently therewithspecially allocated to each such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as possible.
(b) ii. Except as provided in Treasury Regulation subparagraph (iii) of this Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years8.1(b) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Year Partnership fiscal year that is in excess of the sum of (Ai) the amount such Member Partner is required obligated to restore (pursuant to the terms of such Partner's promissory note or otherwise) and (ii) the amount such Partner is deemed to be obligated to restore pursuant to the provisions penultimate sentence of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5Regulations Section 1.704•1(b)(4)(iv)(f), each such Member Partner shall be specially allocated items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to .
iii. Notwithstanding any other provisions of this Section 8.03(c) shall be made only 8.1, if and to the extent that such Member there is a net decrease in Partnership Minimum Gain during any Partnership fiscal year, each Partner who would otherwise have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member year shall be specially allocated items of Company gross Partnership income and gain for such year (and, if necessary, subsequent years) in the an amount of and manner sufficient to eliminate such excess Adjusted Capital Account Deficit as quickly as possible; provided, that an allocation pursuant . The items to this Section 8.03(d) be so allocated shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata determined in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(iI(b)(4)(iv)(e). If more than one Member bears This subparagraph (iii) is intended to comply with the economic risk minimum gain charge-back requirement in such section of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto the Regulations and shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of lossinterpreted consistently therewith.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) iv. To the extent an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Code Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m1 (b) (2)(iv)(m), to be taken into account in determining Capital Accountscapital accounts, the amount of such adjustment to the Capital Accounts capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain gains or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts capital accounts are required to be adjusted pursuant to such Section section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (American Gas & Technology LP)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for each taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income PBF LOGISTICS LP SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP 45 and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(e), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(e) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(e)(vi) and 6.1(e)(vii)). This Section 8.03(a6.1(e)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(e)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(e), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(e), other than Section 6.1(e)(i) and other than an allocation pursuant to Sections 6.1(e)(vi) and 6.1(e)(vii), with respect to such taxable period. This Section 8.03(b6.1(e)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement[Deleted.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.]
Appears in 1 contract
Sources: Limited Partnership Agreement (Suburban Propane Partners Lp)
Special Allocations. The following special allocations will be made in following order and priority:
(a) If there is a net decrease in Company Partnership Minimum Gain during any Allocation Yearfiscal year, each Member shall Partner will be specially allocated items of Company Partnership income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in proportion to, and to the manner and amounts provided extent of, an amount equal to such Partner's share of the net decrease in Treasury Regulation Sections 1.704-2(f)(6), Partnership Minimum Gain determined in accordance with Regulations Section 1.704-2(g)(2) and ). The items to be allocated will be determined in accordance with Regulations Section 1.704-2(j)(2)(i2(f), or any successor provision. This Section 8.03(a4.3
(a) is intended to comply with such Sections of the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) Regulations and shall will be interpreted consistently therewith.
(b) The allocations otherwise required pursuant to Section 4.3(a) hereof will not apply to a Partner to the extent that: (i) such Partner's share of the net decrease in Partnership Minimum Gain is caused by a guaranty, refinancing or other change in the instrument evidencing a nonrecourse debt of the Partnership which causes such debt to become a partially or wholly recourse debt or a Partner Nonrecourse Debt, and such Partner bears the economic risk of loss (within the meaning of Regulations Section
1. 752-2) for such changed debt; (ii) such Partner's share of the net decrease in Partnership Minimum Gain results from the repayment of a nonrecourse liability of the Partnership, which repayment is made using funds contributed by such Partner to the capital of the Partnership; (iii) the Service, pursuant to Regulations Section 1.704-2(f)(4), waives the requirement of such allocation in response to a request for such waiver made by the General Partner on behalf of the Partnership (which request the General Partner may or may not make, in their discretion, if it determines that the Partnership would be eligible therefor); or (iv) additional exceptions to the requirement of such allocation are established by revenue rulings issued by the Internal Revenue Service pursuant to Regulations Section 1.704-2(f)(5), which exceptions apply to such Partner, as determined by the General Partner in its discretion.
(c) Except as provided in Treasury Regulation Section 1.704-2(i)(4)4.3(a) hereof, if there is a net decrease in Member Partner Minimum Gain attributable to Partner Nonrecourse Debt Minimum Gain during any Allocation Yearfiscal year, any Member determined in accordance with Regulations Section 1.704- 2(i)(3), then, except as provided in Regulations Section 1.704-2(i)(4), each Partner who has a share of Member Nonrecourse Debt the Partner Minimum Gain at the beginning of attributable to such Allocation Year shall Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704- 2(i)(5), will be allocated items of Company income and gain for such Allocation Year fiscal year (and, if necessary, subsequent Allocation Yearsfiscal years) equal to such Partner's share of the net decrease in the manner and amounts provided Partner Minimum Gain. The items to be allocated will be determined in Treasury Regulation Sections accordance with Regulations Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(j)(2), or any successor provisions. This Section 8.03(b4.3(c) is intended to comply with Regulations Section 1.704-2(i) and will be applied and interpreted in accordance with such regulation.
(d) Any item of Partnership loss, deduction or expenditure under Code Section 705(a)(2)(b) attributable to Partner Nonrecourse Debt will be allocated in accordance with Regulations Section 1.704-2(i) to the chargeback Partner who bears the economic risk of loss for such debt.
(e) In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) resulting in an Adjusted Capital Account Deficit for such Partner, items of income and gain requirement will be specially allocated to such Partner in Treasury Regulation any amount and manner sufficient to eliminate, to the extent required by the Regulations, such Adjusted Capital Account Deficit as quickly as possible. The items to be allocated will be determined in accordance with Regulations Section 1.704-2(i)(41(b)(2)(ii)(d)(6). This Section 4.3(e) is intended to comply with Regulations Section 1.704-1(b)(2)(ii)(d) and shall will be applied and interpreted consistently therewithin accordance with such regulation.
(cf) No items of loss or deduction will be allocated to any Partner to the extent that any such allocation would cause the Partner to have an, or increase the amount of an existing, Adjusted Capital Account deficit at the end of any Fiscal Year. All items of loss or deduction in excess of the limitation set forth in this Section 4.3(f) will be allocated among such other Partners, which have positive Adjusted Capital Account balances, pro rata, in proportion to such Adjusted Capital Account balances, until each Partner's positive Adjusted Capital Account balance is reduced to zero. Thereafter , any remaining items of loss or deduction will be allocated to the Partners, pro rata, in proportion to their relative aggregate Capital Contributions.
(g) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Year in excess of the sum of (A) the amount fiscal year, each such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall Partner will be specially allocated items of Company gross Partnership income and gain in the amount (consisting of such excess a pro rata portion of each item of Partnership income and gain) as quickly as possible; providedpossible to eliminate such Adjusted Capital Account Deficit, provided that an allocation pursuant to this Section 8.03(c4.3(g) shall will be made only if and only to the extent that such Member Partner would have an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII IV have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentagemade.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset Property pursuant to Section Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall will be specially allocated to among the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Agreement of Limited Partnership (Brookdale Living Communities Inc)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1 In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2 Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3 In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4 Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5 Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6 The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.71 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.71.1 through 1.1.71.5.
Appears in 1 contract
Sources: Limited Partnership Agreement (Brookfield Infrastructure Partners L.P.)
Special Allocations. (a) If Notwithstanding any other provision of this Operating Agreement, the following allocations shall be made for each Fiscal Year or other period:
(i) Notwithstanding any other provision of this Section 6.04, if there is a net decrease in Company Minimum Gain during any Allocation Yeartaxable period, each Member shall be allocated items of Company income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections Treas. Reg. § 1.704-2(f)(62(f), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j). For purposes of this Section 6.04, each Member’s Capital Account shall be determined and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Article 6 with respect to such taxable period. This Section 8.03(a6.04(a)(i) is intended to comply with the Company Minimum Gain partnership minimum gain chargeback requirement in Treasury Regulation Section Treas. Reg. §1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(46.04 (other than 6.04(a)(i) above), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yeartaxable period, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections Treas. Reg. § 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2). For purposes of this Section 6.04, each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.04(a), or any successor provisionsother than Section 6.04(a)(i) above, with respect to such taxable period. This Section 8.03(b6.04(a)(ii) is intended to comply with the Member nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section Treas. Reg. § 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 6.04(a)(i) and 6.04(a)(ii) above, in the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulations, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 6.04(a)(i) and 6.04(a)(ii).
(iv) In the event any Member has a deficit balance in its Adjusted Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable period, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c6.04(a)(iv) shall be made only if and to the extent that such Member would have an a deficit balance in its Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII Section 6.04(a) have been tentatively made as if this Section 8.03(c6.04(a)(iv) were not in this Operating Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(ev) Nonrecourse Deductions for any Allocation Year taxable period shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentagetheir Percentage Interests.
(fvi) Member Nonrecourse Deductions for any Allocation Year taxable period shall be allocated 100% to the Member that bears the economic risk Economic Risk of loss Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section Treas. Reg. § 1.704-2(i) or Treas. Reg. §1.704-2(k). If more than one Member bears the economic risk Economic Risk of loss Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk Economic Risk of lossLoss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Operating Agreement (OTG EXP, Inc.)
Special Allocations. (a) If there Notwithstanding any other provisions of this Agreement, no allocation of Book Net Losses shall be made to any Member to the extent such an allocation would cause a, or increase the, deficit balance standing in such Member’s Adjusted Capital Account and any such Book Net Losses shall instead be allocated to the Members based upon their respective “interests” in the Company as determined in accordance with Treasury Regulation Section 1.704-l(b).
(b) Items of income and gain shall be specially allocated to the Members in accordance with the qualified income offset provisions set forth in Treasury Regulation Section 1.704-l(b)(2)(ii)(d).
(c) Notwithstanding any other provision in this Article IV, (i) any and all “partnership nonrecourse deductions” (as defined in Treasury Regulation Section 1.704-2(b)(l)) of the Company for any fiscal year or other period (A) that are attributable to the Class A Containers shall be allocated to the Class A Members in proportion to their respective Sharing Ratios and (B) that are attributable to the Class B Containers shall be allocated one hundred percent (100%) to the Class B Member; (ii) any and all “partner nonrecourse deductions” (as such term is a net decrease defined in Company Minimum Gain during Treasury Regulation Sections 1.704-2(i)(2)) attributable to any Allocation Year, “partner nonrecourse debt” (as such term is defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to the Member that bears the “economic risk of loss” (as determined under Treasury Regulation Section 1.752-2) for such “partner nonrecourse debt” in accordance with Treasury Regulation Section 1.704-2(i)(l); (iii) each Member shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in accordance with the manner and amounts provided partnership minimum gain chargeback requirements set forth in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(22(f) and 1.704-2(j)(2)(i2(g), or any successor provision. This Section 8.03(a; and (iv) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any each Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year minimum gain attributable to any “partner nonrecourse debt” shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in accordance with the manner and amounts provided in partner minimum chargeback requirements of Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(5). For purposes of determining the Members’ respective shares of Company nonrecourse liabilities pursuant to Section 752 of the Code and the Treasury Regulations promulgated thereunder, or any successor provisions. This Section 8.03(b(i) is intended a Member’s interest in Company profits shall be deemed to comply with include the chargeback allocable share of items of income and minimum gain requirement in (as determined under Treasury Regulation Section 1.704-2(i)(42(g)), Code Section 704(c) gain and any Book Net Incomes allocable to such Member pursuant to this Article IV, and (ii) such Company profits shall be interpreted consistently therewith.
deemed allocable to the Members in the following order of priority: (a) first, to the Members to the extent of, and in proportion to, their respective allocable shares of minimum gain, (b) second, to the Members to the extent of, and in proportion to, their respective shares of Code Section 704(c) gain, (c) In third, to the event any Member has a deficit balance Members to the extent of, and in its proportion to, their respective negative Capital Account at the end of any Allocation Year in excess of the sum of balances, if any; and (d) thereafter, (A) the amount if such Member is required to restore pursuant profits are attributable to the provisions of this Agreement Class A Containers, to the Class A Members in proportion to their respective Sharing Ratios, and (B) the amount if such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and profits are attributable to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(cClass B Containers, one hundred percent (100%) were not in this Agreementto the Class B Member.
(d) In the event any Member has Allocations to Members whose interests vary during a deficit balance in its Capital Account at the end year by reason of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)transfer, such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; providedredemption, that an allocation pursuant to this Section 8.03(d) admission, capital contributions, or otherwise, shall be made only if and to as determined by the extent that such Member would have an Adjusted Capital Account Deficit after all Tax Matters Member, with the consent of the other allocations provided for Members (which consent shall not be unreasonably withheld) in this Article VIII have been tentatively made as if accordance with permissible methods under Section 8.03(c) and this Section 8.03(d) were not in this Agreement706 of the Code.
(e) Nonrecourse Deductions for If any Allocation Year shall be allocated Company property is subject to Code Section 704(c) or is reflected in the Capital Accounts of the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to and on the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities books of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to at a value that differs from the adjusted tax basis of any Company asset pursuant such property, then the tax items with respect to Section 734(b) or 743(b) such property will, in accordance with the requirements of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(ml(b)(4)(i), be shared among the Members in a manner that takes account of the variation between the adjusted tax basis of the applicable property and its value in the same manner as variations between the adjusted tax basis and fair market value of property contributed to be the Company are taken into account in determining Capital Accountsthe Members’ share of tax items under Section 704(c) of the Code. The Tax Matters Member, with the consent of other Members (which consent shall not be unreasonably withheld) is authorized to choose any reasonable method permitted by the Treasury Regulations pursuant to Section 704(c) of the Code, including the “remedial allocation” method, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), “curative” method and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madetraditional” method.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Share Purchase Agreement (Textainer Group Holdings LTD)
Special Allocations. The following special allocations shall be made in the following order:
(a) If Except as otherwise provided in Regulations Section 1.704-2(f), and notwithstanding any other provision of this Article VIII, if there is a net decrease in Company Partnership Minimum Gain during any Allocation Fiscal Year, each Member Partner shall be specially allocated items of Company Partnership income and gain for such Allocation Fiscal Year (and, if necessary, subsequent Allocation Fiscal Years) in an amount equal to such Partner's share of the manner and amounts provided net decrease in Treasury Regulation Partnership Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i2(j)(2), or any successor provision. This Section 8.03(a8.6(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as otherwise provided in Treasury Regulation Regulations Section 1.704-2(i)(4), and notwithstanding any other provision of this Article VIII, if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Allocation Partnership Fiscal Year, any Member with each Partner who has a share of Member the Partner Nonrecourse Debt Minimum Gain at the beginning of attributable to such Allocation Year Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company Partnership income and gain for such Allocation Fiscal Year (and, if necessary, subsequent Allocation Fiscal Years) in an amount equal to such Partner's share of the manner and amounts provided net decrease in Treasury Regulation Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(2), or any successor provisions. This Section 8.03(b8.6(b) is intended to comply with the minimum gain chargeback of items of income and gain requirement in Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance Partner unexpectedly receives any adjustments, allocations, or distributions described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g) and 1(b)(2)(ii)(d)(4), 1.704-2(i)(51(b)(2)(ii)(d)(5), such Member or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated items of Company gross income to each such Partner in an amount and gain in manner sufficient to eliminate, to the amount extent required by the Regulations, the Adjusted Capital Account Deficit of such excess Partner as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c8.6(c) shall be made only if and to the extent that such Member Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made made, as if this Section 8.03(c8.6(c) were not in this Agreement.
(d) In the event any Member Partner has a deficit balance in its an Adjusted Capital Account Deficit at the end of any Allocation Year in excess of the sum of (A) the amount Partnership Fiscal Year, each such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member Partner shall be specially allocated items of Company gross Partnership income and gain in the amount of such excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(d8.6(d) shall be made only if and to the extent that such Member Partner would have an Adjusted a deficit Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c8.6(c) hereof and this Section 8.03(d8.6(d) were not in this Agreement.
(e) Partnership Nonrecourse Deductions for any Allocation Fiscal Year shall be allocated among the Partners in proportion to the Members pro rata in accordance with each Member’s Ownership Percentagetheir respective Percentage Interests.
(f) Member Any Partner Nonrecourse Deductions for any Allocation Fiscal Year shall be specially allocated 100% to the Member that Partner who bears the economic risk of loss with respect to the Member Partner Nonrecourse Debt to which such Member Partner Nonrecourse Deductions are attributable attributable, in accordance with Treasury Regulation Regulations Section 1.704-2(i2(i)(1). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company Partnership asset pursuant to Code Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Regulations Section 1.704-1(b)(2)(iv)(m1(b)(2)(iv)(m)(4), to be taken into account in determining Capital AccountsAccounts as the result of a distribution to a Partner in complete liquidation of its interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), ) and such item of gain or loss shall be specially specifically allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required Partner to be adjusted pursuant to whom such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously distribution was made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Hines Real Estate Investment Trust Inc)
Special Allocations. Notwithstanding any other provision of this Section 5.2, the following special allocations shall be made for each Fiscal Year or other taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.2, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in U.S. Treasury Regulation Regulations Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 5.2(b)(i), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.2(b) with respect to such taxable period (other than an allocation pursuant to Sections 5.2(b)(iii) and (iv)). This Section 8.03(a5.2(b)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in U.S. Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.2 (other than Section 5.2(b)(i)), except as provided in U.S. Treasury Regulation Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in U.S. Treasury Regulation Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 5.2(b)(ii), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.2(b), other than Section 5.2(b)(i) and other than an allocation pursuant to Sections 5.2(b)(v) and (vi), with respect to such taxable period. This Section 8.03(b5.2(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in U.S. Treasury Regulation Regulations Section 1.704-2(i)(42(i) (4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Special Allocations. (a) If there is a net decrease Notwithstanding any other provision of this Agreement, "partner nonrecourse deductions" (as defined in Company Minimum Gain during any Allocation Year, each Member shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(42(i)), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Yearany, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year LLC shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that who bears the economic risk of loss with respect to the Member Nonrecourse Debt debt to which such Member Nonrecourse Deductions deductions are attributable in accordance with Treasury Regulation Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members and "nonrecourse deductions" (as defined in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Regulations Section 1.7521.704-3(a)(32(b)(1), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts LLC shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent accordance with the manner their Percentage Interests and "excess nonrecourse liabilities" (as defined in which their Capital Accounts are required to be adjusted pursuant to such Regulations Section 1.752-3(a)), if any, of the Treasury RegulationsLLC shall be allocated to the Members in accordance with their respective Percentage Interests.
(ib) Notwithstanding This Agreement shall be deemed to include "qualified income offset," "minimum gain chargeback" and "partner nonrecourse debt minimum gain chargeback" provisions within the meaning of the Regulations under Section 704(b) of the Code. Accordingly, notwithstanding any other provision of this Section 8.03Agreement, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected shall be allocated to the Members to the extent and in the manner required by such provisions.
(c) To the extent that Net Loss or items of loss or deduction otherwise allocable to a Member hereunder would cause such Member to have an Adjusted Capital Accounts previously Account Deficit as of the end of the taxable year, or other period, to which such Net Loss, or items of loss or deduction, relate (after taking into account the allocation of all items of income and gain for such taxable period), such Net Loss, or items of loss or deduction, shall not be allocated to such Member and instead shall be allocated to the Members in accordance with Section 6.02 as if such Member were not a Member.
(d) Subject to the provisions of Section 6.07, any allocations required to be made pursuant to Section 6.03(a), Section 6.03(b) and Section 6.03(c) (the "Regulatory Allocations") (other than allocations, the effect of which are likely to be offset in the future by other special allocations) shall be taken into account, to the extent permitted by the Regulations, in computing subsequent allocations of income, gain, loss or deduction pursuant to Section 6.02 so that the net amount of any items so allocated and all other items allocated to such Member shall, to the extent possible, be equal to the amount that would have been allocated to each Member pursuant to Section 6.02 had such Regulatory Allocations under this Section 6.03 not occurred.
(e) Notwithstanding anything to the contrary contained herein, each Member shall be allocated for each taxable year, or portion thereof, an amount of gross income and gain (consisting of a pro rata portion of each item of LLC income and gain and, if necessary, income and gain from subsequent years) equal to the amount of distributions received by such Member pursuant to Section 6.05(b)(ii) in respect of such taxable year.
(f) It is intended that prior to a distribution of the proceeds from a liquidation of the LLC pursuant to the provisions of Section 11.03, the positive Capital Account balance of each Member shall be equal to the amount that such Member would receive if liquidation proceeds were distributed in accordance with the provisions of Section 6.05(c). Accordingly, notwithstanding anything to the contrary in this Article VI (other than Section 6.07), to the extent permissible under Code Section 704(b) and the Regulations promulgated thereunder and subject to compliance with the Fractions Rule, Net Income and Net Loss and, if necessary, items of gross income and gross deductions, of the LLC for the year of liquidation of the LLC (or, if earlier, the year in which all or substantially all of the LLC assets are sold, transferred or disposed of) shall be allocated among the Members so as to bring the positive Capital Account balance of each Member as close as possible to the amount that such Member would receive if there the LLC were a taxable disposition liquidated and all of that property for the fair market value of that property on the date of distribution.
(k) The allocations net proceeds from such liquidation were distributed in Section 8.02, this Section 8.03 and Section 8.05, and accordance with the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposesSection 6.05(c). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Operating Agreement (Reckson Operating Partnership Lp)
Special Allocations. Notwithstanding any provisions of Section 5.1, the following special allocations shall be made, to the least extent necessary to satisfy section 704(b) of the Code and the Regulations promulgated thereunder, in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net decrease in Company Partnership Minimum Gain during for any Allocation YearLLC fiscal year (except as a result of conversion or refinancing of LLC Indebtedness, certain capital contributions or revaluation of the LLC property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Member shall be specially allocated items of Company LLC income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to that Member's share of the manner and amounts provided net decrease in Treasury Partnership Minimum Gain. The items to be so allocated shall be determined in accordance with Regulation Sections Section 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(aparagraph
(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to those paragraph (a) shall be made in proportion to the respective amounts required to be allocated to each partner pursuant hereto.
(b) Except Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any fiscal year (other than due to the conversion, refinancing or other change in the debt instrument causing it to become partially or wholly nonrecourse, certain capital contributions, or certain revaluations of Partnership property (as provided further outlined in Treasury Regulation Section 1.704-2(i)(4)), if there is a net decrease in each Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be specially allocated items of Company LLC income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to the manner and amounts provided Member's share of the net decrease in Treasury the Minimum Gain Attributable to Member Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii(j)(2), or any successor provisions. This Section 8.03(bparagraph (b) is intended to comply with the minimum gain chargeback requirement with respect to Member Nonrecourse Debt contained in said section of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) the Regulations and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation . Allocations pursuant to this Section 8.03(cparagraph (b) shall be made only if and in proportion to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is respective amounts required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership PercentagePartner pursuant hereto.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision of this Section 5.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i2(j)(2) (i), or any successor provision. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 5.1 (d)(v) and (vi)). This Section 8.03(a5.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.1 (other than Section 5.1(d) (i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d), other than Section 5.1(d)(i) and other than an allocation pursuant to Sections 5.1(d)(v) and (vi), with respect to such taxable period. This Section 8.03(b5.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Special Allocations. For purposes of the following provisions of this Section 3.2, the Clorox Partners will be regarded as a single JV Partner with a single Capital Account. Notwithstanding anything contained herein to the contrary:
(a) If there a JV Partner would at any time receive, but for this Section 3.2(a), an allocation of deduction, loss, or expenditure that would cause or increase a deficit balance in such JV Partner's Capital Account in excess of any amount of such deficit balance that the JV Partner is a net decrease obligated to restore or deemed obligated to restore (as determined in Company Minimum Gain during any Allocation Yearaccordance with Treasury Regulation Section 1.704-1(b)(2)(ii)(c)), each Member shall then the portion of such allocation that would cause or increase such deficit Capital Account balance will be specially allocated items of Company income and gain for such Allocation Year (andto the other JV Partners, if necessaryany, subsequent Allocation Years) with positive Capital Account balances in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provisionproportion to such balances. This The loss limitation under this Section 8.03(a3.2(a) is intended to comply with Treasury Regulation Section 1.704-1(b)(2)(ii)(d), including the Company Minimum Gain chargeback requirement reductions described in subparagraphs (4), (5) and (6) therein.
(b) If in any Fiscal Year a JV Partner receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-2(f1(b)(2)(ii)(d)(4), (5) or (6), items of Joint Venture income and shall gain will be interpreted consistently therewith.
(bspecially allocated to each such JV Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Capital Account deficit of such JV Partner as quickly as possible provided that an allocation pursuant to this Section 3.2(b) Except will be made only if and to the extent that such JV Partner would have a Capital Account deficit after all other allocations provided for in this Article III have been tentatively made as provided if this Section 3.2(b) were not in the Agreement. This Section 3.2(b) is intended to qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(41(b)(2)(ii)(d) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall will be interpreted consistently therewith.
(c) In the event any Member has If there is a deficit balance net decrease in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant minimum gain attributed to the provisions Joint Venture or JV Partner nonrecourse debt minimum gain (determined in accordance with the principles of this Agreement Treasury Regulation Sections 1.704-2(d) and 1.704-2(i)) during any Joint Venture taxable year, the JV Partners will be allocated items of income and gain attributed to the Joint Venture for such year (Band, if necessary, subsequent years) the in an amount equal to their respective shares of such Member is deemed obligated to restore net decrease during such year, determined pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall . The items to be specially so allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall will be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable determined in accordance with Treasury Regulation Section 1.704-2(i2(f). If more than one Member bears the economic risk of loss with respect This Section 3.2(c) is intended to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance comply with the ratios minimum gain chargeback requirements in which they share such economic risk Treasury Regulations and will be interpreted consistently therewith, including that no chargeback will be required to the extent of lossthe exceptions provided in Treasury Regulation Sections 1.704-2(f) and 1.704-2(i)(4).
(gd) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations The allocation provisions set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, Article III and the other provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions Accounts are intended to comply with Treasury Regulations Sections Regulation Section 1.704-1 1(b) and 1.704-2 and shall will be interpreted and applied in a manner consistent with such Treasury Regulations Regulations; provided however that such provisions will not affect the economic rights of any JV Partner, including rights to distributions with respect to the Joint Venture.
(e) Any special allocations of items of income, gain, loss or deductions pursuant to Sections 3.2(a), (b) and (c) will be taken into account in computing subsequent allocations pursuant to Section 3.1 and this Section 3.2, so that the net amount of any amendment items so allocated will, to the extent possible, be equal to the net amount that would have been allocated to each such JV Partner pursuant to the provisions of this Article III if such special allocations had not occurred.
(f) In the event that any fees, interest, or successor provision theretoother amounts paid to any JV Partner or any Affiliate thereof pursuant to this Agreement or any other agreement attributed to the Joint Venture with any JV Partner or Affiliate thereof providing for the payment of such amount, and deducted by the Joint Venture in reliance on Section 707(a) and/or 707(c) of the Code, are disallowed as deductions to the Joint Venture on its federal income tax return and are treated as Joint Venture distributions, then:
(i) the Net Profits or Net Loss, as the case may be, for the Fiscal Year in which such fees, interest, or other amounts were paid will be increased or decreased, as the case may be, by the amount of such fees, interest, or other amounts that are treated as Joint Venture distributions; and
(ii) there will be allocated to the JV Partner to which (or to whose Affiliate) such fees, interest, or other amounts were paid, prior to the allocations pursuant to Section 3.1, an amount of gross income for the Fiscal Year equal to the amount of such fees, interest, or other amounts that are treated as Joint Venture distributions.
(g) Prior to the allocation of Net Profits and Net Losses pursuant to Section 3.1, the following allocations shall be made for each Fiscal Year:
(i) The holder of the Class A Interest will be specially allocated royalty income attributable to royalty payments made under the Glad License Agreements for such Fiscal Year in an amount of royalty payments equal to the aggregate amounts distributable to the holder of the Class A Interest under Section 3.5(b)(i) hereof (without regard to distributions treated as guaranteed payments under such Section) in each Fiscal Quarter in such Fiscal Year. Royalty income allocated to the Class A Interest hereunder will be allocated among the various sources of such royalty income in the same manner as withholding taxes are calculated under the definition of “Deemed Withholding Taxes”. The Members shall cause appropriate modifications holder of the Class A Interest will also be specially allocated income for such Fiscal Year in an amount equal to the sum of the IP Allocation Amounts with respect to IP Acquisitions for such Fiscal Year and will be specially allocated all income attributable to Glad License Termination Amounts paid for such Fiscal Year;
(ii) After the allocations pursuant to Section 3.2(g)(i) are made, the holder of the Class B Interest will be specially allocated royalty income attributable to royalty payments made under the Glad License Agreements for such Fiscal Year in an amount equal to the aggregate royalty payments received under the Glad License Agreements for such Fiscal Year, minus the amount of royalty income allocated to the Class A Interest under Section 3.2(g)(i) for such Fiscal Year. The holder of the Class B Interest will also be specially allocated income for such Fiscal Year equal to the aggregate IP Acquisition Prices with respect to IP Acquisitions, if unanticipated events might otherwise cause this Agreement not to comply with any, for such Treasury Regulations, so long as such modifications do not cause a material change Fiscal Year in excess of the aggregate IP Allocation Amounts included in the relative economic benefit calculation of the Members Class A Special Amount and the Class C Special Amount for each Fiscal Quarter in such Fiscal Year;
(iii) The holder of the Class C Interest will be specially allocated royalty income attributable to royalty payments made under this Agreementthe JV Sublicense Agreements in such Fiscal Year in an amount of royalty payments equal to the aggregate royalty payments received under the JV Sublicense Agreements for such Fiscal Year. The holder of the Class C Interest will also be specially allocated income for such Fiscal Year in an amount equal to the sum of the IP Allocation Amounts with respect to IP Acquisitions for such Fiscal Year and will be specially allocated all income attributable to JV Sublicense Termination Amounts paid for such Fiscal Year;
(iv) The Clorox Partners will be specially allocated all deductions arising from the payment of guaranteed payments pursuant to Section 3.5(a) and Section 3.5(b) hereof in such Fiscal Year and shall be specially allocated all income attributable to Prohibited License Amounts received on behalf of the Joint Venture in such Fiscal Year; and
(v) Each JV Partner will be specially allocated all deductions arising from the amortization of organizational expenses (within the meaning of Section 709(b) of the Code) incurred by such JV Partner on behalf of the Joint Venture.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in ACCESS MIDSTREAM PARTNERS, L.P. COMPOSITE AGREEMENT OF LIMITED PARTNERSHIP Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Access Midstream Partners Lp)
Special Allocations. Notwithstanding any other provision of this Section 5.01, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.01, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(61.704‑2(f)(6), 1.704-2(g)(21.704‑2(g)(2) and 1.704-2(j)(2)(i1.704‑2(j)(2)(i), or any successor provision. For purposes of this Section 5.01(b), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.01(b) with respect to such taxable period (other than an allocation pursuant to Sections 5.01(b)(vi) and 5.01(b)(vii)). This Section 8.03(a5.01(b)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f1.704‑2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.01 (other than Section 5.01(b)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(41.704‑2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(41.704‑2(i)(4) and 1.704-2(j)(2)(ii1.704‑2(j)(2)(ii), or any successor provisions. For purposes of this Section 5.01(b), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.01(b), other than Section 5.01(b)(i) and other than an allocation pursuant to Sections 5.01(b)(vi) and 5.01(b)(vii), with respect to such taxable period. This Section 8.03(b5.01(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(41.704‑2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c) with respect to such taxable period (other than an allocation pursuant to Section 6.1(c)(vi) and Section 6.1(c)(vii)). This Section 8.03(a6.1(c)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(c)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c), other than Section 6.1(c)(i) and other than an allocation pursuant to Section 6.1(c)(vi) and Section 6.1(c)(vii), with respect to such taxable period. This Section 8.03(b6.1(c)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. Notwithstanding any other provision of this Article 7 in order to comply with the Code and Regulations for allocations of income, gain, loss, and LIMITED PARTNERSHIP AGREEMENT OF CRIMSON CARDINAL, L.P. — Page 10 deductions attributable to nonrecourse liabilities and Partnership allocations where Partners are not liable to restore deficit capital accounts, the following rules apply:
(a) If there is a net decrease in Company Minimum Gain partnership minimum gain during any Allocation Yearfiscal year or other period, each Member so that an allocation is required by the Code and Regulations (in particular, Section 1.704-2(f)(l) of the Regulations), items of partnership income and gain shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) to the Partners in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) to the extent required by the applicable provisions of the Code and 1.704-2(j)(2)(i), or any successor provisionRegulations. This Section 8.03(a) provision is intended to comply with be a minimum gain chargeback within the Company Minimum Gain chargeback requirement in Treasury Regulation meaning of Section 1.704-2(f1.704(2)(f) of the Regulations and shall be interpreted and applied consistently therewithwith Section 1.704(2)(f) of the Regulations.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if If there is a net decrease in Member Nonrecourse Debt Minimum Gain the minimum gain attributable to a Partner nonrecourse loan during any Allocation Yearfiscal year or other period, any Member so that an allocation is required by Section 1.704-2(i)(4) of the Regulations, a Partner with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year that partner nonrecourse debt minimum gain shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation extent required by Section 1.704-2(i)(4) and shall be interpreted consistently therewithof the Regulations.
(c) In the event If any Member has a deficit balance Partner unexpectedly receives an adjustment, allocation, or distribution described in its Capital Account at the end of any Allocation Year in excess Section 1.704-1(b)(2)(d) (4)-(6) of the sum Regulations, items of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement Partnership income and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member gain shall be specially allocated items to these Partners in an amount and manner sufficient to eliminate, to the extent required by the Regulations, any adjusted capital account deficit of Company gross income and gain in the amount of such excess these Partners as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c) paragraph shall be made only if if, and to the extent that such Member that, this Partner would have an Adjusted Capital Account Deficit adjusted capital account deficit after all other allocations which are provided for in this Article VIII 7 tentatively have been tentatively made as if this Section 8.03(c) paragraph were not in part of this Agreement.
(d) In the event any Member has a deficit balance Any Partner nonrecourse deductions as defined in its Capital Account at the end of any Allocation Year in excess Section 1.704-2(1)(2) of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year Regulations shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member Partner that bears the economic risk of loss with respect to the Member Nonrecourse Debt loan giving rise to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation this deduction within the meaning of Section 1.704-2(i). If more than one Member bears 1.704(2)(l)(2)(a) of the economic risk Regulations.
(e) For income tax purposes, any item of loss income, gain, loss, deduction, or credit with respect to any property (other than money) that has been contributed by a Member Nonrecourse DebtPartner to the capital of the Partnership and which is required to be allocated to Partners for income tax purposes under Section 704 of the Code so as to take into account the variation between the tax basis of this property and its value at the time of its contribution, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted Partners for income tax basis of any Company asset pursuant to purposes in the manner required by Section 734(b) or 743(b) 704 of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, and the amount corresponding Regulations. If and when the capital accounts of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts Partners are required to be adjusted pursuant to such Section 1.704(b)(2)(iv)(f) or (g) of the Treasury Regulations.
(i) Notwithstanding Regulations with respect to a revaluation of any other provision Partnership asset, subsequent allocations of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in deduction, including without limitation depreciation and deductions for cost recovery with respect to this asset, shall take into account any variation between the Capital Accounts previously then existing adjusted basis of this asset for federal income tax LIMITED PARTNERSHIP AGREEMENT OF CRIMSON CARDINAL, L.P. — Page 11 purposes and the value as adjusted of this asset, as this computation may be required under Section 704(b) of the Code and the principles of Section 704(b) of the Code.
(f) Nonrecourse losses shall be allocated among one hundredth of one percent (0.01%) to the Members as if there were a taxable disposition of that property for General Partner and ninety-nine and ninety-nine hundredths percent (99.99%) to the fair market value of that property on the date of distributionLimited Partners.
(kg) The Since the allocations described in Section 8.02, this Section 8.03 and Section 8.057.05 may effect results not consistent with the manner in which the Partners intend to divide Partnership distributions, the General Partner is authorized to divide other allocations of net profits, net losses, and other items among the provisions Partners so as to prevent the special allocations from distorting the manner in which distributions would be divided among the Partners under Article 8 of this Agreement relating except for the application of the special allocations under this Section 7.05. The General Partner shall have discretion to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and accomplish this result in any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a reasonable manner that is consistent with such Treasury Regulations Section 704 of the Code and any amendment or successor provision theretothe corresponding Regulations. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury RegulationsPartners, so long as such modifications do not cause a material change in the relative economic benefit by unanimous written consent of the Members Partners, may agree to make any election permitted by the Regulations under this AgreementSection 704 of the Code that may reduce or eliminate any special allocation that would otherwise be required.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(c)(vi) and 6.1(c)(vii)). This Section 8.03(a6.1(c)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(c)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(c), other than Section 6.1(c)(i) and other than an allocation pursuant to Sections 6.1(c)(v) and 6.1(c)(vi), with respect to such taxable period. This Section 8.03(b6.1(c)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Agreement of Limited Partnership
Special Allocations. (a) If there is a net decrease in Company Minimum Gain during Notwithstanding any Allocation Yearother provision of this Agreement, each Member appropriate adjustments shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in made to the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended allocations to the extent required to comply with the Company Minimum Gain chargeback requirement in “qualified income offset”, “minimum gain chargeback”, “partner nonrecourse debt minimum gain chargeback”, “nonrecourse deductions”, “partner nonrecourse deductions”, and “excess nonrecourse liabilities” rules of the Treasury Regulation Regulations promulgated pursuant to Section 1.704-2(f704(b) and shall be interpreted consistently therewithof the Code.
(b) Except as provided Any other provision set forth in this Article 3 to the contrary notwithstanding, no item of deduction or loss shall be allocated to a Partner to the extent that such allocation would cause a negative balance in such Partner’s Capital Accounts (after taking into account the adjustments, allocations and distributions described in Treasury Regulation Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such Partner would be required to restore to the Partnership. In the event that some but not all of the Partners would have such excess Capital Account deficits as a consequence of such an allocation of loss or deduction, the limitation set forth in this section 3.5(a) shall be applied on a Partner by Partner basis so as to allocate the maximum permissible deduction or loss to each Partner under Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share 1(b)(2)(ii)(d) of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewithRegulations.
(c) In the event If any Member Partner has a deficit balance in its Capital Account at the end of any Allocation Year fiscal period that is in excess of the sum of (Ai) the amount such Member Partner is required obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5)) of the Treasury Regulations, and (ii) adjustments required pursuant to Sections 1.704-1(b)(2)(ii)(d)(4)-(6) of the Treasury Regulations, each such Member Partner shall be specially allocated items of Company gross income and gain Income in the amount of such excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(csection 3.5(c) shall be made only if and to the extent that such Member Partner would have an Adjusted a deficit Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VIII section 3.5 have been tentatively made as if the “qualified income offset” provision and this Section 8.03(csection 3.3(c) were not in this Agreement.
(d) In the event Income (other than any Member has a deficit balance Income described in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5section 3.3(a)(A), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and allocated to the Partners to whom Losses were allocated pursuant to section 3.3(b)(C) to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreementof those Losses.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated The allocations set forth in section 3.5(a) through section 3.5(c) (the “Regulatory Allocations”) are intended to the Members pro rata in accordance comply with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section certain requirements of the Treasury Regulations.
(i) Notwithstanding any other provision . It is the intent of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so Partners that, to the extent possible, the net amount all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of gross Partnership income, gain, loss and loss, or deduction allocated to each Member pursuant to Sections 8.02 and 8.03this section 3.5(e). Therefore, togethernotwithstanding any other provision of this Article 3 (other than the Regulatory Allocations), the Partnership shall be make such offsetting special allocations of Partnership income, gain, loss, or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner’s Capital Account balance is, to the extent possible, equal to the net amount of Capital Account balance such items that Partner would have been had if the Regulatory Allocations were not part of the Agreement and all Partnership items were allocated pursuant to each such Member section 3.3. In exercising its discretion under Section 8.02 and Section 8.03 had this section 3.5(e), the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may Partnership shall take into account future Required Regulatory Allocations pursuant to the “minimum gain chargeback” and “partner nonrecourse debt minimum gain chargeback” provisions under section 3.5(a) that, although not yet made, are likely to offset other Required Regulatory Allocations previously mademade under the “nonrecourse deduction” and “partner nonrecourse deduction” provisions under section 3.5(a).
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Hagedorn Partnership, L.P.)
Special Allocations. Notwithstanding any provisions of section 1 of this Exhibit B, the following special allocations shall be made.
(a) If Minimum Gain Chargeback (Nonrecourse Liabilities). Except as otherwise provided in Section 1.704 2(f) of the Regulations, if there is a net decrease in Company Partnership Minimum Gain during for any Allocation Company Year, each Member shall be specially allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to such Member's share of the manner and amounts provided net decrease in Treasury Regulation Partnership Minimum Gain to the extent required by Regulations Section 1.704-2(f). The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6), 1.704-2(g)(22(f) and 1.704-2(j)(2)(i), or any successor provision(i) of the Regulations. This Section 8.03(asubsection 2
(a) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subsection 2(a) shall be made in proportion to the respective amounts required to be allocated to each Member pursuant hereto.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulation Section 1.704-2(i)(4)) of the Regulations, if there is a net decrease in Member Partner Minimum Gain attributable to a Partner Nonrecourse Debt Minimum Gain during any Allocation Company Year, any each Member with who has a share of Member Nonrecourse Debt the Partner Minimum Gain at attributable to such Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the beginning of such Allocation Year Regulations, shall be specially allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in an amount equal to that Member's share of the net decrease in the Partner Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in the manner and amounts provided required by Section 1.704-2(i) of the Regulations. The items to be so allocated shall be determined in Treasury Regulation Sections 1.704accordance with Sections
1. 704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions(j)(2) of the Regulations. This Section 8.03(bsubsection 2(b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) the Regulations and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation . Allocations pursuant to this Section 8.03(csubsection 2(b) shall be made only if and in proportion to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are respective amounts required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously madehereto.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Operating Agreement (Chartermac)
Special Allocations. Notwithstanding any other provision of this Section 5.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 5.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 5.1(d)(vi) or 5.1(d)(vii)). This Section 8.03(a5.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Minimum Gain Attributable to Partner Nonrecourse Debt. Notwithstanding any other provision of this Section 5.1 (other than Section 5.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 5.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d), other than Section 5.1(d)(i) and other than an allocation pursuant to Sections 5.1(d)(vi) or 5.1(d)(vii), with respect to such taxable period. This Section 8.03(b5.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Plum Creek Timber Co L P)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period: CHESAPEAKE MIDSTREAM PARTNERS, L.P. FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Chesapeake Midstream Partners, L.P.)
Special Allocations. Notwithstanding any other provision of this Section 5.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i2(j)(2) (i), or any successor provision. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 5.1 (d)(v) and (vi)). This Section 8.03(a5.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.1 (other than Section 5.1(d) (i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii)2(j)(2)00, or any successor provisions. For purposes of this Section 5.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(d), other than Section 5.1(d)(i) and other than an allocation pursuant to Sections 5.1(d)(v) and (vi), with respect to such taxable period. This Section 8.03(b5.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.7041.7041-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Ferrellgas Partners Finance Corp)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.83 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.83.1 through 1.1.83.5.
Appears in 1 contract
Sources: Limited Partnership Agreement (Brookfield Property Partners L.P.)
Special Allocations. Notwithstanding the foregoing, the allocations provided in this Article 5 shall be subject to the following exceptions:
(a) If This Agreement is intended to comply with the safe harbor provisions set forth in Treasury Regulations Sections 1.704-1(b) and 1.704-2(i), and the allocations set forth in paragraph 5.2(b) (“Regulatory Allocations”) are intended to comply with certain requirements of such Treasury Regulations. In the event that the Regulatory Allocations result in allocations being made that are inconsistent with paragraph 5.1, the Managing Member may adjust subsequent allocations of any items of income, gain, loss, expense and dedication such that the net amount of the Regulatory Allocations and such subsequent special adjustments to each Member equal $0.00.
(b) The following Regulatory Allocations shall be made in the following order:
(i) Except as otherwise provided in Treasury Regulations Section
1. 704-2(f), notwithstanding any other provision of this Article 5, if there is a net decrease in Company Minimum Gain the Fund’s “partnership minimum gain” (as defined in Treasury Regulations Section 1.704-2(b)(2) and 1.704-2(d)(1)) during any Allocation YearAccounting Period, each Member shall be specially allocated items of Company the Fund’s income and gain for such Allocation Year Accounting Period (and, if necessary, subsequent Allocation YearsAccounting Periods) in an amount equal to such Member’s share of the manner and amounts provided net decrease in partnership minimum gain, determined in accordance with Treasury Regulation Sections 1.704-2(f)(6Regulations Section 1.704- 2(g)(2), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(aparagraph 5.2(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as otherwise provided in Treasury Regulation Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Article 5, if there is a net decrease in Member Nonrecourse Debt Minimum Gain “partner nonrecourse debt minimum gain” (as defined in Treasury Regulations Section 1.704- 2(i)(2)) attributable to a “partner nonrecourse debt” (as defined in Treasury Regulations Section 1.704-2(b)(4)) during any Allocation YearAccounting Period, any each Member with who has a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year partner recourse debt minimum gain attributable to such partner nonrecourse debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company the Fund’s income and gain for such Allocation Year (Accounting Period and, if necessary, subsequent Allocation Years) Accounting Periods, in an amount equal to such Member’s share of the manner and amounts provided net decrease in such partner nonrecourse debt minimum gain, determined in accordance with Treasury Regulation Sections Regulations Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(bparagraph 5.2(b)(ii) is intended to comply with the minimum gain chargeback of items of income and gain requirement in Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) In the event any Member has a deficit balance unexpectedly receives any adjustments, allocations, or distributions described in its Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4) through (d)(6) which cause the Adjusted Capital Account at the end Balance of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)be reduced below $0.00, such Member shall be specially allocated items of Company gross Fund income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Members deficit in it Adjusted Capital Account Balance created by such adjustments, allocations, or distributions as quickly as possible. This paragraph 5.2(b)(iii) is intended to constitute a manner consistent with the manner “qualified income offset” as described in which their Capital Accounts are required to be adjusted pursuant to such Section 1.704- l(b)(2)(ii)(d) of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied consistently therewith.
(iv) If the allocation of Loss (or items of loss or deduction) to a Member as provided in a manner consistent with paragraph 5.1 hereof would create or increase an Adjusted Capital Account Balance deficit, then there shall be allocated to such Treasury Regulations and any amendment Member only that amount or successor provision theretoLoss (or items of loss or deduction) as will not create or increase an Adjusted Capital Account Balance deficit. The Loss (or other items of loss or deduction) that would, absent the application or the preceding sentence, otherwise be allocated to such Member shall be allocated to the other Members shall cause appropriate modifications in proportion to be made if unanticipated events might otherwise cause their relative positive Adjusted Capital Account Balances, subject to the limitations of this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreementparagraph (iv).
Appears in 1 contract
Sources: Limited Liability Company Agreement
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder NYC:103990_15.DOC shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement (Teekay LNG Partners L.P.)
Special Allocations. (a) If The following special allocations shall be made in the following order:
4.4.1. In the event that there is a net decrease during a fiscal year in Company either Partnership Minimum Gain during or Partner Nonrecourse Debt Minimum Gain, then notwithstanding any Allocation Yearother provision of this Article 4, each Member Partner shall be allocated receive such special allocations of items of Company Partnership income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) as are required in the manner and amounts provided in order to conform to Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Regulations Section 1.704-2(f) and shall be interpreted consistently therewith2.
(b) Except as provided in Treasury Regulation 4.4.2. Subject to Section 1.704-2(i)(4)4.4.1, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during but notwithstanding any Allocation Yearother provision of this Article 4, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain shall be specially allocated to the Partners in a manner that complies with the “qualified income offset” requirement in of Treasury Regulation Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith1(b)(2)(ii)(d)(3).
(c) 4.4.3. In the event any Member that a Partner has a deficit balance in its Capital Account balance at the end of any Allocation Year fiscal year which is in excess of the sum of (Ai) the amount such Member Partner is required then obligated to restore pursuant to this Agreement, and (ii) the amount such Partner is then deemed to be obligated to restore pursuant to the provisions penultimate sentences of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Regulations Sections 1.704-2(g2(g)(1) and 1.704-2(i)(5), respectively, such Member Partner shall be specially allocated items of Company gross Partnership income and gain (consisting of a pro rata portion of each item of income and gain of the Partnership for such fiscal year in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) in the amount of such excess as quickly as possible; provided, however, that an any allocation pursuant to under this Section 8.03(c) 4.4.3 shall be made only if and to the extent that such Member a Partner would have an Adjusted a deficit Capital Account Deficit balance in excess of such sum after all other allocations provided for in this Article VIII 4 have been tentatively made as if this Section 8.03(c) 4.4.3 were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) 4.4.4. Partner Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to they share the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) for such Section Partner Nonrecourse Debt.
4.4.5. Each Nonrecourse Deduction of the Treasury RegulationsPartnership shall be specially allocated to the Partners, pro rata, in proportion to their respective Percentage Interests.
(i) Notwithstanding 4.4.6. The amounts of any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross Partnership income, gain, loss and deduction or expense available to be specially allocated to each Member pursuant to Sections 8.02 and 8.03, together, this Section 4.4 shall be equal determined by applying rules analogous to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations those set forth in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations 1.1.74 as modified by Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement1.1.74.1 through 1.1.74.5.
Appears in 1 contract
Sources: Limited Partnership Agreement (Brookfield Business Partners L.P.)
Special Allocations. Notwithstanding any other provision of this Article 7 in order to comply with the Code and Regulations for allocations of income, gain, loss, and LIMITED PARTNERSHIP AGREEMENT deductions attributable to nonrecourse liabilities and Partnership allocations where Partners are not liable to restore deficit capital accounts, the following rules apply:
(a) If there is a net decrease in Company Minimum Gain partnership minimum gain during any Allocation Yearfiscal year or other period, each Member so that an allocation is required by the Code and Regulations (in particular, Section 1.704-2(f)(l) of the Regulations), items of partnership income and gain shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) to the Partners in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) to the extent required by the applicable provisions of the Code and 1.704-2(j)(2)(i), or any successor provisionRegulations. This Section 8.03(a) provision is intended to comply with be a minimum gain chargeback within the Company Minimum Gain chargeback requirement in Treasury Regulation meaning of Section 1.704-2(f1.704(2)(f) of the Regulations and shall be interpreted and applied consistently therewithwith Section 1.704(2)(f) of the Regulations.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if If there is a net decrease in Member Nonrecourse Debt Minimum Gain the minimum gain attributable to a Partner nonrecourse loan during any Allocation Yearfiscal year or other period, any Member so that an allocation is required by Section 1.704-2(i)(4) of the Regulations, a Partner with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year that partner nonrecourse debt minimum gain shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation extent required by Section 1.704-2(i)(4) and shall be interpreted consistently therewithof the Regulations.
(c) In the event If any Member has a deficit balance Partner unexpectedly receives an adjustment, allocation, or distribution described in its Capital Account at the end of any Allocation Year in excess Section 1.704-1(b)(2)(d) (4)-(6) of the sum Regulations, items of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement Partnership income and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member gain shall be specially allocated items to these Partners in an amount and manner sufficient to eliminate, to the extent required by the Regulations, any adjusted capital account deficit of Company gross income and gain in the amount of such excess these Partners as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c) paragraph shall be made only if if, and to the extent that such Member that, this Partner would have an Adjusted Capital Account Deficit adjusted capital account deficit after all other allocations which are provided for in this Article VIII 7 tentatively have been tentatively made as if this Section 8.03(c) paragraph were not in part of this Agreement.
(d) In the event any Member has a deficit balance Any Partner nonrecourse deductions as defined in its Capital Account at the end of any Allocation Year in excess Section 1.704-2(1)(2) of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year Regulations shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member Partner that bears the economic risk of loss with respect to the Member Nonrecourse Debt loan giving rise to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation this deduction within the meaning of Section 1.704-2(i). If more than one Member bears 1.704(2)(l)(2)(a) of the economic risk Regulations.
(e) For income tax purposes, any item of loss income, gain, loss, deduction, or credit with respect to any property (other than money) that has been contributed by a Member Nonrecourse DebtPartner to the capital of the Partnership and which is required to be allocated to Partners for income tax purposes under Section 704 of the Code so as to take into account the variation between the tax basis of this property and its value at the time of its contribution, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted Partners for income tax basis of any Company asset pursuant to purposes in the manner required by Section 734(b) or 743(b) 704 of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, and the amount corresponding Regulations. If and when the capital accounts of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts Partners are required to be adjusted pursuant to such Section 1.704(b)(2)(iv)(f) or (g) of the Treasury Regulations.
(i) Notwithstanding Regulations with respect to a revaluation of any other provision Partnership asset, subsequent allocations of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in deduction, including without limitation depreciation and deductions for cost recovery with respect to this asset, shall take into account any variation between the Capital Accounts previously then existing adjusted basis of this asset for federal income tax LIMITED PARTNERSHIP AGREEMENT OF FRIENDS OF FALLS ROAD, L.P. — Page 11 purposes and the value as adjusted of this asset, as this computation may be required under Section 704(b) of the Code and the principles of Section 704(b) of the Code.
(f) Nonrecourse losses shall be allocated among one hundredth of one percent (0.01%) to the Members as if there were a taxable disposition of that property for General Partner and ninety-nine and ninety-nine hundredths percent (99.99%) to the fair market value of that property on the date of distributionLimited Partners.
(kg) The Since the allocations described in Section 8.02, this Section 8.03 and Section 8.057.05 may effect results not consistent with the manner in which the Partners intend to divide Partnership distributions, the General Partner is authorized to divide other allocations of net profits, net losses, and other items among the provisions Partners so as to prevent the special allocations from distorting the manner in which distributions would be divided among the Partners under Article 8 of this Agreement relating except for the application of the special allocations under this Section 7.05. The General Partner shall have discretion to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and accomplish this result in any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a reasonable manner that is consistent with such Treasury Regulations Section 704 of the Code and any amendment or successor provision theretothe corresponding Regulations. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury RegulationsPartners, so long as such modifications do not cause a material change in the relative economic benefit by unanimous written consent of the Members Partners, may agree to make any election permitted by the Regulations under this AgreementSection 704 of the Code that may reduce or eliminate any special allocation that would otherwise be required.
Appears in 1 contract
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi)). This Section 8.03(a6.1(d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement
Special Allocations. 3.4.1. In the event the Limited Partners unexpectedly receive any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to the Limited Partners in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the negative capital account created by such adjustments, allocations or distributions as quickly as possible. For purposes of the preceding sentence, Partners' Capital Accounts shall be reduced for the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (a) 5), and (6). The provisions of this Section 3.4.1 are intended to comply with the requirements of Treasury Regulation Section 1.704-1(b), including any amendments or successor regulations thereto, and shall be so interpreted.
3.4.2. If there is a net decrease in Company Minimum Gain Partnership minimum gain as defined in Regulation Section 1.704-2(d) during any Allocation Yeara Partnership taxable year, then each Member shall Partner must be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) year in an amount equal to such Partner's share of the manner and amounts provided net decrease in Treasury Partnership minimum gain as computed under Regulation Sections 1.704-2(f)(6), Section 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This The provisions of this Section 8.03(a) is 3.4.2 are intended to comply with the Company Minimum Gain chargeback requirement in Treasury requirements of Regulation Section 1.704-2(f) 2, including any amendments or successor regulations thereto, and shall be interpreted consistently therewithso interpreted.
(b) Except as provided 3.4.3. Notwithstanding any provision of this Article III to the contrary, to the extent allocations of loss or deductions to a Limited Partner would cause such Limited Partner to have a negative Capital Account balance, or increase the negative balance in Treasury Regulation Section 1.704-2(i)(4)a Limited Partner's Capital Account, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year loss or deduction shall be allocated items among those Limited Partners with positive Capital Account balances to the extent thereof and in proportion thereto, with any remaining loss or deduction being allocated to the General Partner. For the purposes of Company income this Section 3.4.3, distributions made prior to or contemporaneous with any allocation to a Limited Partner shall be reflected in such Partner's Capital Account prior to making such allocation to such Partner, and gain for a Partner's Capital Account shall be credited to the extent (i) such Allocation Year Partner is unconditionally obligated to make additional contributions to the Partnership; (and, if necessary, subsequent Allocation Yearsii) such Partner is unconditionally obligated to fund a deficit in the manner his Capital Account upon liquidation; and amounts provided in Treasury (iii) such Partner is deemed to be obligated to restore his Capital Account balance pursuant to Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g2(s)(1) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) 3.4.4. In no event shall the event any Member has a deficit balance General Partner's interest in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in or credit be less than 1% of each such item at all times during the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit existence of the Members under this AgreementPartnership.
Appears in 1 contract
Sources: Limited Partnership Agreement (Province Healthcare Co)
Special Allocations. Notwithstanding any other provisions of this Section 6.1, thefollowing special allocations shall be made on a Series by Series basis in the following order foreach taxable period:
(ai) If Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Minimum Gain attributable to a Series during any Allocation Yeartaxable year, each Member of suchSeries shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2(g)(2) and 1.704-2(j)(2)(i(j)(2)(i). For purposes of this Section 6.1(b), each Member’s Adjusted Capital Account balance for such Series shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any successor provisionother allocations pursuant to this Section
6.1 with respect to such taxable year. This Section 8.03(a6.1(b)(i) is intended to comply with the Company Minimum Gain minimum gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except as provided in Treasury Regulation Notwithstanding the other provisions of this Section 1.704-2(i)(46.1 (other than Section 6.1(b)(i) above), if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Series during any Allocation Yeartaxable year, any Member with a share of such Member Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable year shall be allocated items of Company income and gain attributable to such Series for such Allocation Year year (and, if necessary, subsequent Allocation Yearstaxable years) in the manner and amounts provided in Treasury Regulation Sections Section 1.704-2(i)(4) and 1.704-2(j)(2)(ii2(i)(4)and (j)(2)(ii). For purposes of this Section 6.1(b), or each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any successor provisionsother allocations pursuant to this Section 6.1, other than Section 6.1(b)(i) above, with respect to such taxable year. This Section 8.03(b6.1(b)(ii) is intended to comply with the partner nonrecourse debt minimum gain chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(ciii) Except as provided in Sections 6.1(b)(i) and 6.1(b)(ii) above, in the eventany Member unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) attributable to a Series, items of income and gain of such Series shall be allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by such Treasury Regulation, the deficit balance, ifany, in its Adjusted Capital Account attributable to such Series created by such adjustment, allocation or distribution as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Sections 6.1(b)(i), 6.1(b)(ii), 6.1(b)(iv) or 6.1(b)(v). This Section 6.1(b)(iii) is intended to constitute a qualified income offset described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) In the event any Member has a deficit balance in its Adjusted Capital Account attributable to a Series at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)taxable year, such Member shall be specially allocated items of Company gross income and gain of such Series in the amount of such excess as quickly as possible; provided, however, that an allocation pursuant to this Section 8.03(c6.1(b)(iv) shall be made only if and to the extent that such Member would have an a deficit balance in its Adjusted Capital Account Deficit for such Series after all other allocations provided for in this Article VIII Section 6.1(b) (other than Section 6.1(b)(iii)) have been tentatively made as if Section 6.1(b)(iii) and this Section 8.03(c6.1(b)(iv) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(ev) Nonrecourse Deductions attributable to a Series for any Allocation Year taxable year shall be allocated to the Members pro rata of such Series in accordance with each Member’s Ownership Percentagetheir Percentage Interests for suchSeries.
(fvi) Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for any Allocation Year taxable year shall be allocated 100% to the Member that bears the economic risk Economic Risk of loss Loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk Economic Risk of loss Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk Economic Risk of loss.
(gLoss. This Section 6.1(b)(vi) For purposes is intended to comply with the provisions of Treasury Regulation Section 1.7521.704-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company 2(i) and shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentageinterpreted consistently therewith.
(hvii) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section pursuantto Code Sections 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1.704- 1(b)(2)(iv)(m), to be taken into account in determining Capital AccountsAccounts as a result of a distribution in liquidation of a Member’s Interest in a Series, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts CapitalAccounts are required to be adjusted pursuant to such Section of the Treasury Regulationsprovisions.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Liability Company Agreement
Special Allocations. Notwithstanding anything to the contrary herein,
(a) If there is With respect to any Fiscal Year in which one or more contributions are required to be made by a net decrease Partner pursuant to the provisions of Section 4.3(e) and (f), including the Fiscal Year in Company Minimum Gain during any Allocation Yearwhich a Terminating Event occurs, the Partner required to make such contributions, (or each Member shall Partner to the extent applicable), will be allocated items of Company income loss and gain deduction equal to the aggregate amount of such Partner’s respective required contributions, so that the net change to each such Partner’s respective Adjusted Capital Account balance on account of all such allocations and contributions is zero, provided that for purposes of this Section 5.7 amounts deemed contributed by CNL pursuant to the provisions of Section 4.3(e) shall not be treated as required to be contributed. In the event the items of loss and deduction required to be allocated with respect to any Fiscal Year exceed the aggregate amount of the items of loss and deduction available to be allocated with respect to such Allocation Fiscal Year, such items shall be allocated in a subsequent Fiscal Year or reallocated with respect to a prior Fiscal Year (andincluding prior Fiscal Years for which one or more amended returns would be required to be filed as a result of making such allocations), if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6to the extent necessary to satisfy the requirements of this Section 5.7(a), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This Section 8.03(a) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Allocation Year, any Member In connection with a share the sale of Member Nonrecourse Debt Minimum Gain at all or substantially all of the beginning assets of such Allocation Year shall be allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), Partnership or any successor provisions. This Section 8.03(b) is intended to comply with the chargeback of other Terminating Event, items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and deduction and loss shall be interpreted consistently therewith.
(c) In allocated among the event any Member has a deficit balance in its Partners, so that, to the maximum extent possible, the Adjusted Capital Account at the end balances of any Allocation Year in excess each of the sum Partners equals the amount which, if distributed to each of (A) the respective Partners would result in each such Partner receiving the amount such Member is required Partner would be entitled to restore receive if all available amounts were distributed to the Partners pursuant to the provisions of this Agreement Section 5.1(b) at such time; (determined in the manner described in Section 5.1, and (B) the amount such Member is deemed obligated after taking into account any amounts required to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5be funded as a Distribution Excess), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, provided that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized afterof the current Fiscal CNL VILLAGE RETAIL PARTNERSHIP, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, LP 50 Year are insufficient to the extent possible, the ratio of each Member’s achieve such Adjusted Capital Account to the sum balances, items of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, loss and deduction inherent in property that has not been reflected in the Capital Accounts previously of prior Fiscal Years shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02Partners to achieve, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of maximum extent possible, such Adjusted Capital Accounts, apply solely Account balances (including prior Fiscal Years for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall which one or more amended returns would be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications required to be made if unanticipated events might otherwise cause this Agreement not to comply with filed as a result of making such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreementallocations).
Appears in 1 contract
Sources: Limited Partnership Agreement (CNL Income Properties Inc)
Special Allocations. Any contrary provision of this Article IV notwithstanding, the following special allocations will be made in the following order:
(a) If there is a net decrease in Company Partnership Minimum Gain during any Allocation YearCompany taxable year, then, except as provided in Treas. Reg. § l.704-2(f)(2)-(5), each Member shall Unitholder will be specially allocated items of Company income and gain for such Allocation Year year (and, if necessary, subsequent Allocation Yearsyears) in proportion to, and to the manner and amounts provided extent of, such Unitholder’s share of the net decrease in Treasury Regulation Sections Partnership Minimum Gain determined in accordance with Treas. Reg. § 1.704-2(g)(2). The items to be allocated will be determined in accordance with Treas. Reg. § 1.704-2(f)(6), ) and Treas. Reg. § 1.704-2(g)(2) and 1.704-2(j)(2)(i2(j)(2), or any successor provision. This Section 8.03(a4.3(a) is intended to comply with such sections of the Company Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) Regulations and shall will be interpreted consistently therewith.
(b) Except as provided in Treasury Regulation Section 1.704-2(i)(4), if If there is a net decrease in Member Partner Minimum Gain attributable to Partner Nonrecourse Debt Minimum Gain during any Allocation YearCompany taxable year, any Member determined in accordance with Treas. Reg. § 1.704-2(i)(3), then, except as provided in Treas. Reg. § 1.704-2(i)(4), each Unitholder who has a share of Member Nonrecourse Debt the Partner Minimum Gain at the beginning of attributable to such Allocation Year shall Partner Nonrecourse Debt, determined in accordance with Treas. Reg. § l.704-2(i)(5), will be allocated constituent items of Company income and gain for such Allocation Year Company taxable year (and, if necessary, subsequent Allocation YearsCompany taxable years) equal to such Unitholder’s share of the net decrease in the manner and amounts provided Partner Minimum Gain. The items to be allocated will be determined in Treasury Regulation Sections accordance with Treas. Reg. § 1.704-2(i)(4) and Treas. Reg. § 1.704-2(j)(2)(ii2(j)(2), or any successor provisions. This Section 8.03(b4.3(b) is intended to comply with ▇▇▇▇▇. Reg. § l.704-2(i) and will be applied and interpreted in accordance with such regulation.
(c) Nonrecourse Deductions will be allocated among the chargeback Class B Unitholders pro rata according to the number of Class B Units then-held by them.
(d) Partner Nonrecourse Deductions will be allocated in accordance with Treas. Reg. § 1.704-2(i) to the Unitholder who bears the economic risk of loss for the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions relate.
(e) If any Unitholder unexpectedly receives any adjustments, allocations or distributions described in Treas. Reg. §§ 1.704-1 (b)(2)(ii)(d) (4), (5) or (6) resulting in an Adjusted Capital Account Deficit for such Unitholder, then constituent items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall will be specially allocated items of Company gross income to such Unitholder in an amount and gain in manner sufficient to eliminate, to the amount of extent required by the Treasury Regulations, such excess Adjusted Capital Account Deficit as quickly as possible. This Section 4.3(e) is intended to comply with Treas. Reg. § 1.704-l(b)(2)(ii)(d) and will be applied and interpreted in accordance with such regulation; provided, provided that an allocation pursuant to this Section 8.03(c4.3(e) shall will be made only if and to the extent that such Member Unitholder would have an Adjusted Capital Account Deficit after all other allocations provided for in under this Article VIII IV have been tentatively made as if this Section 8.03(c4.3(e) were not in this Agreement.
(df) In No items of loss or deduction will be allocated to any Unitholder to the event extent that any Member has a deficit balance in its such allocation would cause the Unitholder to have or increase an Adjusted Capital Account Deficit at the end of any Allocation Year Company taxable year. All items of loss or deduction in excess of the sum of limitation set forth in this Section 4.3(f) will be allocated pro rata among such other Unitholders (Awho do not have such Adjusted Capital Account Deficits) the amount according to their respective Capital Contributions until no Unitholder may be allocated any such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of loss or deduction without having or increasing such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for Deficit. Thereafter, any Allocation Year shall remaining items of loss or deduction will be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% among the Unitholders according to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of losstheir respective Capital Contributions.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset property is required pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section Treas. Reg. § 1.704-1(b)(2)(iv)(m), to be taken into account ) in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall will be specially allocated to among the Members Unitholders in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section section of the Treasury Regulations.
(ih) Notwithstanding any other provision of this Section 8.03, the The allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (fSection 4.3(a) and (hthrough Section 4.3(g) (the “Required the” Regulatory Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections certain requirements of Treas. Reg. § 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.l(b)
Appears in 1 contract
Sources: Limited Liability Company Agreement (Ardent Health Partners, LLC)
Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(ai) If Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Company Partnership Minimum Gain during any Allocation YearPartnership taxable period, each Member Partner shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. This For purposes of this Section 8.03(a6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Section 6.1(d)(vi) and Section 6.1(d)(vii)). This
Section 6.1 (d)(i) is intended to comply with the Company Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(bii) Except Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net decrease in Member Partner Nonrecourse Debt Minimum Gain during any Allocation YearPartnership taxable period, any Member Partner with a share of Member Partner Nonrecourse Debt Minimum Gain at the beginning of such Allocation Year taxable period shall be allocated items of Company Partnership income and gain for such Allocation Year period (and, if necessary, subsequent Allocation Yearsperiods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation pursuant to Section 6.1 (d)(vi) and Section 6.1(d)(vii), with respect to such taxable period. This Section 8.03(b6.1(d)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if this Section 8.03(c) were not in this Agreement.
(d) In the event any Member has a deficit balance in its Capital Account at the end of any Allocation Year in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.03(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VIII have been tentatively made as if Section 8.03(c) and this Section 8.03(d) were not in this Agreement.
(e) Nonrecourse Deductions for any Allocation Year shall be allocated to the Members pro rata in accordance with each Member’s Ownership Percentage.
(f) Member Nonrecourse Deductions for any Allocation Year shall be allocated 100% to the Member that bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Member bears the economic risk of loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such economic risk of loss.
(g) For purposes of Treasury Regulation Section 1.752-3(a)(3), the Members agree that Nonrecourse Liabilities of the Company shall be allocated the Members pro rata in accordance with each Member’s Ownership Percentage.
(h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(i) Notwithstanding any other provision of this Section 8.03, the allocations set forth in Sections 8.03(a), (b), (c), (d), (e), (f) and (h) (the “Required Allocations”) shall be taken into account so that, to the extent possible, the net amount of items of gross income, gain, loss and deduction allocated to each Member pursuant to Sections 8.02 and 8.03, together, shall be equal to the net amount of such items that would have been allocated to each such Member under Section 8.02 and Section 8.03 had the Required Allocations and this Section 8.03(i) not otherwise been provided in this Agreement. The Company may take into account future Required Allocations that, although not yet made, are likely to offset other Required Allocations previously made.
(j) Items of income, gain, loss and deduction realized after, or in anticipation of, a Dissolution Event shall be allocated in a manner that will cause, to the extent possible, the ratio of each Member’s Capital Account to the sum of all Members’ Capital Accounts to be equal to such Member’s Ownership Percentage. Upon a Dissolution Event, if any property is distributed in kind, any unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the Capital Accounts previously shall be allocated among the Members as if there were a taxable disposition of that property for the fair market value of that property on the date of distribution.
(k) The allocations in Section 8.02, this Section 8.03 and Section 8.05, and the provisions of this Agreement relating to the maintenance of Capital Accounts, apply solely for U.S. federal income tax purposes (and any related state income tax purposes). Such provisions are intended to comply with Treasury Regulations Sections 1.704-1 and 1.704-2 and shall be interpreted and applied in a manner consistent with such Treasury Regulations and any amendment or successor provision thereto. The Members shall cause appropriate modifications to be made if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations, so long as such modifications do not cause a material change in the relative economic benefit of the Members under this Agreement.
Appears in 1 contract
Sources: Limited Partnership Agreement