Common use of Regulatory and Tax Allocations Clause in Contracts

Regulatory and Tax Allocations. Notwithstanding Section 6.1, items of income and gain shall be allocated to the Partners in a manner that complies with the “qualified income offset” requirement of Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(3). To the extent permitted pursuant to Treasury Regulations Section 1.704-2, nonrecourse deductions (as defined in Treasury Regulations Section 1.704-2) of the Partnership shall be allocated to the Partners in proportion to their respective Percentage Interests. If there is a net decrease in the Partnership’s partnership minimum gain or partner nonrecourse debt minimum gain (as defined in Treasury Regulations Section 1.704-2), then the Partners shall be allocated items of Partnership income and gain in a manner that complies with the “minimum gain chargeback” requirements of Treasury Regulations Section 1.704-2. For purposes of determining the Partner’s shares of excess nonrecourse deductions (as defined in Treasury Regulations Section 1.752-3(a)), the Partner’s respective interests in Partnership profits shall be deemed equal to their respective Percentage Interests. Allocations of tax items shall in all events be made in a manner that is consistent with Treasury Regulations Section 1.704-1(b) and Code Section 704(c). Notwithstanding anything in this Article VI to the contrary, the General Partner may make such allocations for purposes of maintaining Capital Accounts and for U.S. federal income tax purposes as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account such facts and circumstances as it deems reasonably necessary for these purposes.