Qualified Income Offset, etc Sample Clauses
The Qualified Income Offset clause is designed to ensure that partners in a partnership do not receive distributions that would cause their capital accounts to fall below zero, except in specific, qualified circumstances. In practice, this clause requires that if a partner's capital account becomes negative due to unexpected allocations or distributions, future income allocations must first be used to restore the deficit before any further distributions are made to that partner. This mechanism is essential for maintaining compliance with tax regulations and for protecting the partnership from unintended tax consequences, as it helps ensure that allocations of income, gain, loss, and deduction are made in a manner consistent with the economic arrangement of the partners.
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Qualified Income Offset, etc. To the extent the allocation provisions of Section 4.1 would not comply with the Treasury Regulations under Section 704(b) of the Code, there is hereby included in this Agreement such special allocation provisions governing the allocation of income, gain, loss, deduction and credit (prior to making the remaining allocations in conformity with Section 4.1) as may be necessary to provide herein a so-called “qualified income offset,” and ensure that this Agreement complies with all provisions, including “minimum gain” provisions, relating to the allocation of so-called “nonrecourse deductions” and “partner nonrecourse deductions” and the charge back thereof as are required to comply with the Treasury Regulations under Section 704 of the Code. In particular, so-called “nonrecourse deductions” and “excess nonrecourse liabilities,” as defined in the Treasury Regulations under Sections 704 and 752 of the Code, shall be allocated to the Members in proportion to the ratios in which they would share distributions under Section 3.1 if all distributions were made pursuant to such section.
Qualified Income Offset, etc. To the extent the allocation provisions of Section 5.1 would not comply with the Regulations promulgated under Section 704(b) of the Code, there is hereby included in this Agreement such special allocation provisions governing the allocation of Profit and Loss and items thereof as may be necessary to provide herein a so-called "qualified income offset," limit the allocation of losses that would cause a capital account to become negative to an impermissible extent, and ensure that this Agreement complies with all other provisions, including "minimum gain" provisions, relating to the allocation of so-called "nonrecourse deductions" and "Member nonrecourse deductions" and the charge back thereof as are required to comply with the Regulations under Section 704 of the Code. A Member's "interest in partnership profits" for purposes of determining its share of the nonrecourse liabilities of the Company within the meaning of Regulation Section 1.752-3(a)(3) shall be its Percentage Interest in the Company.
Qualified Income Offset, etc. There is hereby included in this Agreement such provisions governing the allocation of taxable income and loss (prior to making the remaining federal income tax allocations in conformity with Section 7.3.2 hereof) (and items thereof) as may be necessary to provide that the Company contains a so-called "Qualified Income Offset" and complies with all provisions relating to the allocation of so-called "Non-recourse Deductions" and "Partner Non-recourse Deductions" and the chargeback thereof as are required to comply with the Treasury Regulations under section 704 of the Code, provided, however, the incorporation of such provisions and any appropriate curative allocations necessary to effect compliance with the aforesaid Code provisions shall affect only the computation of taxable net income and loss and the allocation thereof as between Members and shall not otherwise affect the amount or timing of any distribution of cash or property to any Member provided for in this Agreement.