Common use of Adjustment to Capital Accounts for Distributions of Property Clause in Contracts

Adjustment to Capital Accounts for Distributions of Property. If property distributed in kind is reflected in the Capital Accounts of the Partners at a book value (i.e., the property’s basis for purposes of determining Profit and Loss with respect thereto as determined in accordance with the principles set forth in the definition of Profits and Losses in Section 1.1) that differs from the Fair Market Value of the property at the time of distribution, the difference shall be treated as Profit or Loss on the sale of the property and shall be allocated among the Partners, as of the time immediately prior to such distribution, in accordance with the provisions of this Section 4.1.