Character of Liquidating Distributions Clause Samples
The "Character of Liquidating Distributions" clause defines how distributions made to partners or shareholders during the liquidation of an entity are classified for tax and accounting purposes. Typically, this clause specifies whether such distributions are treated as returns of capital, capital gains, or ordinary income, depending on the nature of the assets distributed and the recipient's basis in the entity. By clarifying the tax treatment of liquidating distributions, this clause helps ensure compliance with tax laws and provides certainty to recipients regarding their tax obligations, thereby preventing disputes and misunderstandings during the winding-up process.
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Character of Liquidating Distributions. 33 14.9 The Liquidator................................................................................ 33 14.10 Form of Liquidating Distributions............................................................ 34
Character of Liquidating Distributions. All payments made in liquidation of the interest of a Unit Holder in the Company shall be made in exchange for the interest of such Unit Holder in Property pursuant to Section 736(b)(1) of the Code, including the interest of such Unit Holder in Company goodwill.
Character of Liquidating Distributions. All payments made in liquidation of Units of a Member shall be made in exchange for Units of such Member in property pursuant to Code Section 736(b)(1), including the interest of such Member in Company goodwill.
Character of Liquidating Distributions. All payments made in liquidation of the Interest of a retiring Partner pursuant to Article 11 shall be made in exchange for the interest of such Partner in Partnership Property pursuant to Section 736(b)(1) of the Code, including the interest of such Partner in Partnership goodwill.
Character of Liquidating Distributions. All payments made in liquidation of the Interest of a retiring Member (whether pursuant to Article X or Article XII hereof) shall be made in exchange for the interest of such Member in Property pursuant to Section 736(b)(1) of the Code, including the interest of such Member in Company goodwill.
Character of Liquidating Distributions. All payments made in liquidation of the Interest of a Member shall be made in exchange for the Interest of such Member in the Company’s assets pursuant to Code Section 736(b)(1), including the interest of such Member in Company goodwill.
Character of Liquidating Distributions. Except as otherwise required by the I.R.C., amounts paid to Members pursuant to this Section 14.4 shall be treated as made in exchange for the interest of the Member in Company property pursuant to I.R.C. Section 736(b)(1), including the interest of such Member in Company goodwill.
Character of Liquidating Distributions. 36 ARTICLE XII
Character of Liquidating Distributions. (a) All payments made in liquidation of the Membership Interests of a Member in the Company shall be made in exchange for the Membership Interests of such Member in the Company Property pursuant to Code Section 736(b)(1), including the interest of such Member in Company goodwill.
(b) For purposes of making distributions required by Section 13.2, the Liquidator may determine whether to distribute all or any portion of the Property in-kind or to sell all or any portion of such assets and distribute the proceeds therefrom; provided that the Liquidator shall not distribute Property other than Cash to a Limited Member without such Limited Member’s consent and the Liquidator shall be required to reduce Property to Cash to the extent necessary to make distributions in Cash to the Limited Member pursuant to Section 13.2.
Character of Liquidating Distributions. All payments made in liquidation of the Membership Interest of a Member in the Company shall be made in exchange for the Membership Interest of such Member in Property pursuant to Code Section 736(b)(1), including the interest of such Member in Company goodwill.