Common use of Federal Income Tax Matters Clause in Contracts

Federal Income Tax Matters. The Certificateholders acknowledge that it is their intent and that they understand it is the intent of the Depositor and the Servicer that, for purposes of federal income, State and local income and franchise tax and any other income taxes, the Issuer shall be treated as either an entity that is disregarded as separate from the beneficial owner of the equity in the Issuer if there is only one such owner, or as a partnership (other than an association or publicly traded partnership) if there are two or more such owners, and income, expenses, gain or loss of the Issuer for such month as determined for federal, State and local income and franchise tax purposes shall be allocated among the Certificateholders as of the Record Date occurring within such month, in proportion to their ownership of the Certificate on such date. The Depositor hereby agrees and each Certificateholder by acceptance of a Certificate agrees to such treatment and each agrees to take no action inconsistent with the foregoing characterization. The Depositor is authorized to modify the allocations in this Section if necessary or appropriate, in its sole discretion, for the allocations to reflect fairly the economic income, expenses, gain or loss to the Certificateholders or as otherwise required by the Code.