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

Deficit Capital Accounts and Qualified Income Offset. Notwithstanding any provisions of this Agreement to the contrary, an allocation of loss or deduction which would result in a party having a deficit Capital Account balance as of the end of the taxable year to which the allocation relates, if charged to the party, to the extent the Participant is not required to restore the deficit to the Partnership, taking into account: (i) adjustments that, as of the end of the year, reasonably are expected to be made to the party's Capital Account for depletion allowances with respect to the Partnership's natural gas and oil properties; (ii) allocations of loss and deduction that, as of the end of the year, reasonably are expected to be made to the party under ss.ss.704(e)(2) and 706(d) of the Code and Treas. Reg. ss.1.751-1(b)(2)(ii); and (iii) distributions that, as of the end of the year, reasonably are expected to be made to the party to the extent they exceed offsetting increases to the party's Capital Account, assuming for this purpose that the fair market value of Partnership property equals its adjusted tax basis, that reasonably are expected to occur during or prior to the Partnership taxable years in which the distributions reasonably are expected to be made; shall be charged to the Managing General Partner. Further, the Managing General Partner shall be credited with an additional amount of Partnership income or gain equal to the amount of the loss or deduction as quickly as possible to the extent such chargeback does not cause or increase deficit balances in the parties' Capital Accounts which are not required to be restored to the Partnership. Notwithstanding any provisions of this Agreement to the contrary, if a party unexpectedly receives an adjustment, allocation, or distribution described in (i), (ii), or (iii) above, or any other distribution, which causes or increases a deficit balance in the party's Capital Account which is not required to be restored to the Partnership, the party shall be allocated items of income and gain, consisting of a pro rata portion of each item of Partnership income, including gross income, and gain for the year, in an amount and manner sufficient to eliminate the deficit balance as quickly as possible.

Deficit Capital Accounts and Qualified Income Offset. Notwithstanding any provisions of this Agreement to the contrary, an allocation of loss or deduction which would result in a party having a deficit Capital Account balance as of the end of the taxable year to which the allocation relates, if charged to the party, to the extent the Participant is not required to restore the deficit to the Partnership, taking into account: (i) adjustments that, as of the end of the year, reasonably are expected to be made to the party's Capital Account for depletion allowances with respect to the Partnership's natural gas and oil properties; (ii) allocations of loss and deduction that, as of the end of the year, reasonably are expected to be made to the party under ss.ss.704(e)(2Sections 704(e)(2) and 706(d) of the Code and Treas. Reg. Section 1. ss.1.751751-1(b)(2)(ii); and (iii) distributions that, as of the end of the year, reasonably are expected to be made to the party to the extent they exceed offsetting increases to the party's Capital Account, assuming for this purpose that the fair market value of Partnership property equals its adjusted tax basis, that reasonably are expected to occur during or prior to the Partnership taxable years in which the distributions reasonably are expected to be made; shall be charged to the Managing General Partner. Further, the Managing General Partner shall be credited with an additional amount of Partnership income or gain equal to the amount of the loss or deduction as quickly as possible to the extent such chargeback does not cause or increase deficit balances in the parties' Capital Accounts which are not required to be restored to the Partnership. Notwithstanding any provisions of this Agreement to the contrary, if a party unexpectedly receives an adjustment, allocation, or distribution described in (i), (ii), or (iii) above, or any other distribution, which causes or increases a deficit balance in the party's Capital Account which is not required to be restored to the Partnership, the party shall be allocated items of income and gain, consisting of a pro rata portion of each item of Partnership income, including gross income, and gain for the year, in an amount and manner sufficient to eliminate the deficit balance as quickly as possible.

Deficit Capital Accounts and Qualified Income Offset. Notwithstanding any provisions of this Agreement to the contrary, an allocation of loss or deduction which would result in a party having a deficit Capital Account balance as of the end of the taxable year to which the allocation relates, if charged to the party, to the extent the Participant is not required to restore the deficit to the Partnership, taking into account: (i) adjustments that, as of the end of the year, reasonably are expected to be made to the party's Capital Account for depletion allowances with respect to the Partnership's natural gas and oil properties; (ii) allocations of loss and deduction that, as of the end of the year, reasonably are expected to be made to the party under ss.ss.704(e)(2) and 706(d) of the Code and Treas. Reg. ss.1.751ss. 1. 751-1(b)(2)(ii); and (iii) distributions that, as of the end of the year, reasonably are expected to be made to the party to the extent they exceed offsetting increases to the party's Capital Account, assuming for this purpose that the fair market value of Partnership property equals its adjusted tax basis, that reasonably are expected to occur during or prior to the Partnership taxable years in which the distributions reasonably are expected to be made; shall be charged to the Managing General Partner. Further, the Managing General Partner shall be credited with an additional amount of Partnership income or gain equal to the amount of the loss or deduction as quickly as possible to the extent such chargeback does not cause or increase deficit balances in the parties' Capital Accounts which are not required to be restored to the Partnership. Notwithstanding any provisions of this Agreement to the contrary, if a party unexpectedly receives an adjustment, allocation, or distribution described in (i), (ii), or (iii) above, or any other distribution, which causes or increases a deficit balance in the party's Capital Account which is not required to be restored to the Partnership, the party shall be allocated items of income and gain, consisting of a pro rata portion of each item of Partnership income, including gross income, and gain for the year, in an amount and manner sufficient to eliminate the deficit balance as quickly as possible.

Deficit Capital Accounts and Qualified Income Offset. Notwithstanding any provisions of this Agreement to the contrary, an allocation of loss or deduction which would result in a party Partner having a deficit Capital Account balance as of the end of the taxable year to which the such allocation relates, if charged to the partysuch Partner, (to the extent the Participant such Partner is not required to restore the such deficit to the Partnership), taking into account: : (i) adjustments that, as of the end of the such year, reasonably are expected to be made to the partysuch Partner's Capital Account for depletion allowances with respect to the Partnership's natural oil and gas and oil properties; ; (ii) allocations of loss and deduction that, as of the end of the such year, reasonably are expected to be made to the party under ss.ss.704(e)(2such Partner pursuant to ..704(e)(2) and 706(d) of the Code and Treas. Reg. ss.1.751. 1. 751-1(b)(2)(ii); and and (iii) distributions that, as of the end of the such year, reasonably are expected to be made to the party such Partner to the extent they exceed offsetting increases to the partysuch Partner's Capital Account, Account (assuming for this purpose that the fair market value of Partnership property equals its adjusted tax basis, ) that reasonably are expected to occur during (or prior to to) the Partnership taxable years in which the such distributions reasonably are expected to be made; , shall be charged to the Managing General Partner. Further; provided further, the Managing General Partner shall be credited with an additional amount of Partnership income or gain equal to the amount of the such loss or deduction as quickly as possible (to the extent such chargeback does not cause or increase deficit balances in the partiesPartners' Capital Accounts which are not required to be restored to the Partnership). Notwithstanding any provisions of this Agreement to the contrary, if a party such Partner unexpectedly receives an adjustment, allocation, or distribution described in (i), (ii), or (iii) above, or any other distribution, which causes or increases a deficit balance in the partysuch Partner's Capital Account which is not required to be restored to the Partnership, the party such Partner shall be allocated items of income and gain, gain (consisting of a pro rata portion of each item of Partnership income, including gross income, and gain for the such year, ) in an amount and manner sufficient to eliminate the such deficit balance as quickly as possible.

Deficit Capital Accounts and Qualified Income Offset. Notwithstanding any provisions of this Agreement to the contrary, an allocation of loss or deduction which would result in a party Participant having a deficit Capital Account balance as of the end of the taxable year to which the allocation relates, if charged to the partyParticipant, (to the extent the Participant is not required to restore the deficit to the Partnership), taking into account: (i) adjustments that, as of the end of the year, reasonably are expected to be made to the partyParticipant's Capital Account for depletion allowances with respect to the Partnership's natural oil and gas and oil properties; (ii) allocations of loss and deduction that, as of the end of the such year, reasonably are expected to be made to the party under ss.ss.704(e)(2Participant pursuant to Sections 704(e)(2) and 706(d) of the Code and Treas. Reg. Section 1. ss.1.751751-1(b)(2)(ii); and (iii) distributions that, as of the end of the such year, reasonably are expected to be made to the party Participant to the extent they exceed offsetting increases to the partyParticipant's Capital Account, Account (assuming for this purpose that the fair market value of Partnership property equals its adjusted tax basis, ) that reasonably are expected to occur during (or prior to to) the Partnership taxable years in which the distributions reasonably are expected to be made; , shall be charged to the Managing General Partner. Further, the Managing General Partner shall be credited with an additional amount of Partnership income or gain equal to the amount of the such loss or deduction as quickly as possible (to the extent such chargeback does not cause or increase deficit balances in the partiesParticipants' Capital Accounts which are not required to be restored to the Partnership). Notwithstanding any provisions of this Agreement to the contrary, if a party Participant unexpectedly receives an adjustment, allocation, or distribution described in (i), (ii), or (iii) above, or any other distribution, which causes or increases a deficit balance in the partyParticipant's Capital Account which is not required to be restored to the Partnership, the party Participant shall be allocated items of income and gain, gain (consisting of a pro rata portion of each item of Partnership income, including gross income, and gain for the such year, ) in an amount and manner sufficient to eliminate the such deficit balance as quickly as possible.