Common use of Section 704 Allocations Clause in Contracts

Section 704 Allocations. In the event that the fair market value of an item of Company property differs from its tax basis, allocations of depreciation and amortization, gain and loss with respect to such property will be made for tax purposes in a manner that takes account of the variation between the tax basis and the fair market value of such property in accordance with the Internal Revenue Code Section 704 and Treasury Regulations Section 1.704-1(4).