Common use of Rounding adjustments Clause in Contracts

Rounding adjustments. Any ad- justment necessary to eliminate the section 467 loan because of rounding the yield to two or more decimal places must be taken into account as an ad- justment to the section 467 interest for the final rental period determined as provided in paragraph (e) of this sec- tion. (2) Yield of section 467 rental agree- ments for which constant rental amount or proportional rental amount is com- puted. In the case of a section 467 rent- al agreement to which § 1.467–1(d)(2)(i) or (ii) applies, the yield of the section 467 loan equals 110 percent of the appli- cable Federal rate (based on a compounding period equal to the length of the rental period). (3) Yield for purposes of applying para- graph (a) (4) of this section. For purposes of applying paragraph (a)(4) of this sec- tion, the yield of the section 467 loan balance of any party, or prior party, to a section 467 rental agreement for a pe- riod is the same for all parties and is the yield that results in the net ac- crual of positive or negative interest for that period equal to the amount of such interest that accrues under the terms of the rental agreement for that period. For example, if property sub- ject to a section 467 rental agreement is sold (transferred) and the beginning section 467 loan balance of the trans- feror (as described in § 1.467–7(e)(2)(i)) is positive and the beginning section 467 loan balance of the transferee (as de- scribed in § 1.467–7(e)(2)(ii)) is negative, the yield on each of these loan balances for any period is the same for all par- ties and is the yield that results in the net accrual of positive or negative in- terest, taking into account the aggre- gate positive or negative interest on the section 467 loan balances of both the transferor and transferee, equal to the amount of such interest that ac- crues under the terms of the rental agreement for that period.