General Rules of Allocation Sample Clauses

General Rules of Allocation. All items of income, gain, loss and deduction, whether or not includible or deductible for federal income tax purposes, shall be allocated among the Partners and credited to or debited against their respective Capital Accounts as set forth in this Section 5.2. The purpose of this Section is to specify the manner in which such items are credited or debited among the Capital Accounts of the Partners, which in turn will affect (i) distributions upon liquidation pursuant to Sections 3.3, 10.5, 10.6 or 10.7 and (ii) the Partners’ distributive shares of such items for federal income tax purposes. The Partners’ respective entitlement to nonliquidating cash distributions are governed by Article 4, and not by this Section. In computing Capital Account balances for purposes of subsections (a) and (b) of this Section, such balances shall be reduced by all distributions of Cash Flow with respect to such Fiscal Year under Section 4.1(a), even if such distributions were made after the close of the Fiscal Year, and increased by an amount equal to the portion of each Partner’s share of the net decrease in Partnership minimum gain or minimum gain attributable to partner nonrecourse debt (as defined in Section 5.2(c)(1)) allocable to the disposition of Partnership property subject to one or more nonrecourse liabilities of the Partnership or partner nonrecourse debt, as the case may be, that would occur if all such properties were disposed of for an amount equal to the principal amount of such liability or debt as of the close of the Fiscal Year.