Common use of Deficit Capital Account Chargeback and Qualified Income Offset Clause in Contracts

Deficit Capital Account Chargeback and Qualified Income Offset. If any Member has a deficit balance in its Capital Account at the end of any year, including a deficit balance for such Member caused or increased by an adjustment, allocation or distribution described in Treasury Regulations ss. 1.704-1(b)(2)(ii)(d)(4), (5) or (6), such Member shall be allocated items of income and gain (consisting of a pro rata portion of each item of Company income, including gross income and gain) in an amount and manner sufficient to eliminate such deficit balance in its Capital Account as quickly as possible to the extent required by Treasury Regulations ss. 1.704-1(b)(2)(ii). This SECTION 2.5(a)(iii) is intended to constitute a "qualified income offset" pursuant to Treasury Regulations ss. 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

Deficit Capital Account Chargeback and Qualified Income Offset. If any Member has a deficit balance in its Capital Account in excess of such Member's share of partnership minimum gain and partner nonrecourse debt minimum gain at the end of any year, including a deficit balance for such Member caused or increased by an adjustment, allocation or distribution described in Treasury Regulations ss. 1.704-1(b)(2)(ii)(d)(4), (5) or (6), such Member shall be allocated items of income and gain (consisting of a pro rata portion of each item of Company income, including gross income and gain) in an amount and manner sufficient to eliminate such deficit balance in its Capital Account as quickly as possible to the extent required by Treasury Regulations ss. 1.704-1(b)(2)(ii). This SECTION Section 2.5(a)(iii) is intended to constitute a "qualified income offset" pursuant to Treasury Regulations ss. 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.