Book Capital Account Clause Samples

Book Capital Account. The Company will establish and maintain a capital account for each Member (the “Book Capital Account”). (a) Each Member’s Book Capital Account is increased by: (i) the amount of money contributed by the Member to the Company; (ii) the fair market value of property contributed by the Member to the Company (net of liabilities secured by such contributed property that the Company assumes); (iii) allocations to the Member of Company book income and gain; (iv) upon the revaluation of Company property pursuant to Section 3.3, the book gain (if any) that would have been allocated to the Member if such Company property had been sold at its Fair Market Value immediately before the event that requires the revaluation; and (v) upon distribution of Company property to a Member, if the Company property is not revalued pursuant to Section 3.3, the book gain (if any) that would have been allocated to such Member if such Company property had been sold at its Fair Market Value immediately before the distribution; (b) and is decreased by: (i) the amount of money distributed to it by the Company; (ii) the fair market value of property distributed to it by the Company (net of liabilities secured by such distributed property which the Member assumes); (iii) allocations of Company book loss; (iv) upon the revaluation of Company property pursuant to Section 3.3, the book loss (if any) that would have been allocated to the Member if such Company property had been sold at its Fair Market Value immediately before the event that requires the revaluation; and (v) upon distribution of Company property to a Member, if the Company property is not revalued pursuant to Section 3.3, the book loss (if any) that would have been allocated to such Member if such Company property had been sold at its Fair Market Value immediately before the distribution; and shall be otherwise adjusted in accordance with the additional rules set forth in the Tax Regulations. Company book income and book loss shall be determined on the same basis as partnership income, gain, deduction, and loss is determined for purposes of maintaining capital accounts under the rules set forth in Section 1.704-1(b)(2)(iv) of the Tax Regulations. The Company may (if the Members so determine), upon the occurrence of the events specified in Section 1.704-1(b)(2)(iv)(f) of the Tax Regulations, increase or decrease the Book Capital Accounts of the Members in accordance with the rules of such regulation and Section 1.704-1(b)(2)(iv)(...