Common use of Allocations of Profits, Losses and Distributions Clause in Contracts

Allocations of Profits, Losses and Distributions. (a) All profits of the Partnership for income tax and financial accounting and reporting purposes shall be allocated as follows: (i) First, all of the profits shall be allocated to the Limited Partner in an amount equal to the total First Tier Distributions which have been accrued. (ii) Second, any remaining unallocated profits in a subject fiscal year shall be allocated all to the General Partner. (iii) Third, losses shall be allocated to the Limited Partner only to the extent of First Tier Distributions paid to the Limited Partner in that fiscal year, and after reducing the loss by any General Partner Home Builder Expense Reimbursement. For accounting and income tax purposes, no loss shall be allocated to the Limited Partner which includes any General Partner Home Building Expense Reimbursement. All additional losses, if any, shall be allocated to the General Partner. (iv) All of the profits and losses of the Partnership shall for such allocation purposes be determined for each fiscal year on a cumulative basis so that all profits and losses from the inception of the Partnership are considered in making such allocations. (b) Notwithstanding the foregoing, the Limited Partner shall have no liability for losses greater than as set forth in Sections 6.2 and 8.3 of this Agreement.