Common use of Allocation of Income and Loss Clause in Contracts

Allocation of Income and Loss. (a) All items of income, gain, loss, deduction or credit shall be allocated to all Members and Assignees in accordance with their respective Units in the Company. All outstanding Units shall be treated equally. (b) Notwithstanding anything to the contrary in this Section 5.02, if there is a net decrease in "minimum gain" (within the meaning of Treasury Regulations Section 1.704-2(d) and (g) during a fiscal year, all Members with a deficit balance in their Capital Accounts at the end of that year (excluding items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4)-(6) shall be allocated, before any other allocations of such items for such fiscal year, items of Income and gain for such year (and if necessary, subsequent years), in an amount and in the proportions necessary to eliminate such deficits as quickly as possible. The foregoing sentence is intended to be a "minimum gain charge back" provision as described in Treasury Regulations Section 1.704-2(f), and shall be interpreted and applied in all respects in accordance with that regulation. (c) If during any fiscal year of the Company, any Member unexpectedly receives an adjustment, allocation, or distribution of the type described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),(5), or (6), that Member shall be allocated items of Income (consisting of a pro rata portion of each item of partnership income, including gross income, and gain for such year) in an amount and manner sufficient to eliminate that Member's deficit Capital Account balance as quickly as possible. (d) Under regulations prescribed by the Secretary of the Treasury pursuant to Section 704(c) of the Code, items of Capital Gain, Income and Loss with respect to property contributed to the Company by a Member shall be shared among Members so as to take account of the variation between the basis of the property to the Company and its fair market value at the time of contribution. The Members shall have the power to make such elections, adopt such conventions, and allocate Capital Gain, Income and Loss as each of them deems appropriate to comply with Section 704(c) of the Code and any Treasury Regulations promulgated thereunder and to preserve, to the extent possible, uniformity of the Units. Any item allocated under this Section 5.02(d) shall not be debited or credited to a Member's Capital Account to the extent that such item is already taken into account (upon formation or otherwise) in determining such Member's Capital Account.

Allocation of Income and Loss. (a) All items of income, gain, loss, deduction or credit A. Income and Loss for each taxable year shall be allocated to all among the Members and Assignees in accordance with their respective Units the ratio of the Income interests set forth in the Company. All outstanding Units shall be treated equally.Exhibit A. (b) B. Notwithstanding anything to the contrary in this Section 5.024.02, if there is a net decrease in "minimum gain" (within the meaning of Treasury Regulations Section 1.704-2(d) and (g1(b)(4)(iv)(c)) during a fiscal year, all Members with who would otherwise have a deficit balance in their Capital Accounts at the end of that year (excluding items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4)-(61(b)(4)(iv)(e)) shall be allocated, before any other allocations of such Company items for such fiscal that year, items of Income and gain for such year (and if necessary, subsequent years), in an amount and in the proportions necessary to eliminate such deficits as quickly as possible. The foregoing sentence is intended to be a "minimum gain charge back" provision as described in Treasury Regulations Section 1.704-2(f1(b)(4)(iv)(e), and shall be interpreted and applied in all respects in accordance with that regulation. (c) C. If during any fiscal year of the Company, any Member unexpectedly receives an adjustment, allocation, or distribution of the type described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),(51(b)(2)(ii)(d)(4), (5), or (6), that Member shall be allocated items of Income (consisting of a pro rata portion of each item of partnership income, including gross income, and gain for such year) Gain consistently with the methods specified in any applicable Regulations in an amount and manner sufficient to eliminate that Member's deficit Capital Account balance as quickly as possible. (d) D. Under regulations prescribed by the Secretary of the Treasury pursuant to Section 704(c) of the Code, items of Capital Gain, Income and Loss with respect to property contributed to the Company by a Member Tax Items shall be shared among Members so as allocated to take account of the for any variation between the basis of the contributed property to the Company and its fair market value at the time of contribution. The Members shall have the power to make such elections, adopt such conventions, and allocate Capital Gain, Income and Loss as each of them deems appropriate to comply with Section 704(c) of the Code and any Treasury Regulations promulgated thereunder and to preserve, to the extent possible, uniformity of the Units. Any item items allocated under this Section 5.02(d4.02(D) shall not be debited or credited to a Member's the Capital Account Accounts. E. Income or Loss attributable to borrowing for which certain Members bear and others do not bear an economic risk of loss shall be allocated among the Members in accordance with the provisions of Treasury Regulations Section 1.704-2. F. If made in accordance with this Agreement, the transfer of an interest shall be deemed effective as of end of the month preceding the date of the transfer, unless the transferee and transferor have designated some other month end as the effective time, and the Income and Loss attributable to the transferred interest shall, for Federal income tax purposes, be allocated accordingly. The Members may revise, alter or otherwise modify the method of allocation as they determine necessary to comply with Section 706 of the Code and regulations or rulings promulgated thereunder. G. If, and to the extent that, any Member is deemed to recognize Income as a result of any transaction between the Member and the Company pursuant to Sections 482, 483, 1272-1274, or 7872 of the Code, or any similar provision now or hereafter in effect, any corresponding resulting Loss or deduction of the Company shall be allocated to the Member who was charged with that Income. H. All tax credits for Federal or state income tax purposes shall be allocated in the same manner as Income. I. A net loss for any taxable year shall be allocated in the ratio of the positive balances in the Capital Accounts. Income for any year shall be allocated in the ratio of the cash distributions during such item is already taken year (to the extent of such cash distributions). Any additional Income shall be allocated in the ratio of deficit balances in the Capital Accounts until any deficit balances are eliminated and then in the ratio of the Income interests set forth on Exhibit A. Gain or loss from disposition of all or substantially all the Company’s Company Property shall be excluded from the foregoing and shall be allocated so as to bring the balances of the Capital Accounts into account (upon formation the ratio of the Income interests. No allocation shall eliminate any discrepancy in the Capital Accounts resulting from the failure to make any required contribution or otherwise) in determining such Member's Capital Accountfrom any distribution contrary to this Agreement.