Common use of Allocations for Income Tax Purposes Clause in Contracts

Allocations for Income Tax Purposes. The income, gains, losses, deductions and credits of the Company for any Taxable Year shall be allocated to the Members in the same manner as Net Income and Net Loss were allocated to the Members for such Taxable Year pursuant to Section 5.1 and Section 5.2; provided, however, that solely for Federal, state and local income and franchise tax purposes and not for book or Capital Account purposes, income, gain, loss and deduction with respect to any Company asset with a Gross Asset Value other than the tax basis of such Company asset (other than a Company asset that is a partnership interest for Federal income tax purposes) shall be allocated for Federal, state and local income tax purposes in accordance with the “traditional method with curative allocations” described in section 1.704-3(c) of the Regulations, but with curative allocations limited to curative allocations of gain from the sale or other disposition of each such asset; and provided, further, that, with respect to each Company asset that is a partnership interest for Federal income tax purposes, the method applied upon a disposition of such partnership interest shall, in the discretion of the Managing Member, be the “remedial allocation method” described in section 1.704-3(d) of the Regulations.