Common use of Federal Income Tax Allocation Clause in Contracts

Federal Income Tax Allocation. It is the intention of the parties hereto that, for federal income tax purposes, the Company shall be disregarded as an entity apart from the Managing Member, as long as the Managing Member is the holder of all the beneficial interest in the Company for federal income tax purposes, or treated as a partnership if the Managing Member is not the holder of all the beneficial interest in the Company for federal income tax purposes. The parties agree that, unless otherwise required by appropriate tax authorities, the Managing Member will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Company as a division of the Managing Member, or as a partnership, as the case may be, for such tax purposes. For so long as the Managing Member’s Percentage Interest is 100%, the Company shall be disregarded as an entity separate from the Managing Member and all net income of the Company for any month as determined solely for federal income tax purposes (and each item of income, gain, loss, credit and deduction entering into the computation thereof) shall be allocated to the Managing Member and treated in the same manner as if the Company were a division or branch of the Managing Member.