Common use of Tax Basis Clause in Contracts

Tax Basis. For tax purposes: (a) The tax basis of any assets contributed to the Partnership constitutes the tax basis of such assets in the hands of the Partnership. (b) Assets that are purchased by the Partnership from a Partner shall have as their tax basis the cost of such asset to the Partnership. As to any asset contributed by a Partner (including, without limitation, inventory and all other tangible and intangible assets of any kind), the tax consequences to the non-contributing Partner shall be, to the extent permitted by applicable federal tax rules, the same as if such asset were sold to the Partnership for its fair market value.