Common use of Other Income Tax Allocations Clause in Contracts

Other Income Tax Allocations. (i) The deduction for depletion with respect to each Depletable Property shall, in accordance with Code Section 613A(c)(7)(D), be computed for U.S. federal income tax purposes separately by the Members rather than the Company. Except as provided in Section 5.05(b), for purposes of such computation, the proportionate share of the adjusted tax basis of each Depletable Property shall be allocated among the Members based upon their relative Capital Interest Percentages as of the date of the acquisition of, or the addition of improvements capitalized in the basis subject to depletion of, such Depletable Property by the Company. Further, upon the occurrence of an adjustment to the Carrying Values of the Depletable Properties of the Company pursuant to clause (ii) of the definition of Carrying Value, except as provided in Section 5.05(b), the proportionate share of the adjusted tax basis of each such Depletable Property shall be reallocated among the Members based upon the relative Capital Interest Percentages of the Members as of the date of such adjustment. Each Member shall separately keep records of its share of the adjusted tax basis in each Depletable Property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain or loss on the disposition of such property by the Company. Upon the request of the Company, each Member shall advise the Company of its adjusted tax basis in each Depletable Property and any depletion computed with respect thereto, both as computed in accordance with the provisions of this subsection. The Company may rely on such information and, if it is not provided by the Member, may make such reasonable assumptions as it shall determine with respect thereto.