Common use of Initial or final short periods Clause in Contracts

Initial or final short periods. If a disqualified leaseback or long-term agreement has an initial or final short rental period, the constant rental amount for the initial or final short pe- riod may be determined under any rea- sonable method. However, the sum of the present values of all the constant rental amounts must equal the present values of all amounts payable under the disqualified leaseback or long-term agreement as rent and interest. Any adjustment necessary to eliminate the section 467 loan balance because of the method used to determine the constant rental amount for short periods must be taken into account as section 467 rent for the final rental period.