Common use of Special Rules Regarding Allocations Clause in Contracts

Special Rules Regarding Allocations. Notwithstanding the foregoing provisions of Sections 6.1(a) and 6.1(b): (i) In accordance with sections 704(b) and (c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company and its agreed value. As provided for by Treasury Regulations Section 1.704-3(a)(3)(i), with respect to any Property which is deemed to be contributed by the Company to the "new" Company by virtue of the Company's deemed liquidation under Section 708(b)(1)(B) of the Code, the allocations described in the previous sentence shall only be required with respect to, and to the extent that, such allocations would have otherwise been required without regard to the effects of the deemed liquidation. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2) to reflect the fair market value of any Property, subsequent allocations of income, gain, loss and deduction with respect to such asset shall, solely for tax purposes, take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under section 704(c) of the Code and the Treasury Regulations thereunder. (ii) At no time shall any allocation of losses be made to a Member if such allocation would cause the deficit in the Member's Capital Account, if any, to exceed his "partnership minimum gain" or "partner nonrecourse debt minimum gain" (as defined in Treasury Regulations Sections 1.704-2(b)(2) and (g)(1) and (i)(2) and (5), respectively), and any losses not allocated to a Member by reason of this clause (ii) shall be allocated to each Member whose deficit, if any, in the Member's Capital Account of such Member shall not exceed his allocable share of such minimum gain by reason of such allocation, or to the Members who bear the economic risk of loss attributable to such losses, and subsequent profits shall be allocated to Members to the extent losses have previously been allocated to them pursuant to this Section 6.1(c)(ii). (iii) Nonrecourse deductions, as defined in Treasury Regulations Section 1.704-2(b)(1), shall be allocated among the Members in proportion to their Percentage Interests. Partner nonrecourse deductions shall be allocated among the Members in the proportion to which they share the economic risk of loss with respect to the partner nonrecourse debt to which such deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). (iv) If there is a net decrease in the "partnership minimum gain" (within the meaning of Treasury Regulations Section 1.704-2(g)(2)) for a Company taxable year, then, before any allocations are made for such year other than those pursuant to clause (ii) above, each Member with a share of the partnership minimum gain at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary for subsequent years) in an amount equal to each Member's share of the net decrease in partnership minimum gain as determined in accordance with Treasury Regulations Section 1.704-2(f) in a manner so as to satisfy the requirements of said Treasury Regulation. (v) If, during any taxable year, there is a net decrease in partner nonrecourse debt minimum gain, then, before any other allocations are made for such year other than those pursuant to clause (ii) above, each Member with a share of the partner nonrecourse debt minimum gain at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each Member's share of the net decrease in partner nonrecourse debt minimum gain as determined in accordance with Treasury Regulations Section 1.704-2(i)(4) in a manner so as to satisfy the requirements of said Treasury Regulation. (vi) If, during any taxable year, a Member unexpectedly receives, or, as of the end of such year, is reasonably expected to receive, an adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d), and if such adjustment, allocation or distribution would cause at the end of the taxable year a deficit balance in such Member's Capital Account in excess of his allocable share of minimum gain as described above, then such Member shall be allocated items of income and gain for such

Appears in 1 contract

Samples: Operating Agreement (Hardin Development Corp)

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Special Rules Regarding Allocations. Notwithstanding the foregoing provisions of Sections 6.1(a) and 6.1(b):Section 6.1: (i) In accordance with sections Sections 704(b) and (c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any Property property contributed to the capital of the Company (including all or part of any deemed capital contribution under Section 708 of the Code) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property property to the Company and its agreed value. As provided for by Treasury Regulations Section 1.704-3(a)(3)(i), with respect to any Property which is deemed to be contributed by the Company to the "new" Company by virtue of the Company's deemed liquidation under Section 708(b)(1)(B) of the Code, the allocations described in the previous sentence shall only be required with respect to, and to the extent that, such allocations would have otherwise been required without regard to the effects of the deemed liquidation. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulations Regulation Section 1.704-1(b)(2) to reflect the fair market value of any Company Property, subsequent allocations of income, gain, loss and deduction with respect to such asset shall, solely for tax purposes, shall take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under section Section 704(c) of the Code and the Treasury Regulations thereunder. (ii) At no time shall any allocation of losses be made to a Member if such allocation would cause the deficit in the Member's Adjusted Capital Account, if any, to exceed his allocable share of "partnership minimum gain" or "partner minimum gain attributable to Member nonrecourse debt minimum gaindebt" (as defined in Treasury Regulations Regulation Sections 1.704-2(b)(22(g)(1) and (g)(1) and (i)(2) and (5i)(5), respectively), and any losses not allocated to a Member by reason of this clause (ii) shall be allocated to each Member whose deficit, if any, in the Member's Adjusted Capital Account of such Member shall not exceed his allocable share of such minimum gain by reason of such allocation, or to the Members who bear the economic risk of loss attributable to such losses, and subsequent profits shall be allocated to Members to the extent losses have previously been allocated to them pursuant to this Section 6.1(c)(ii). (iii) Nonrecourse deductions, as defined in Treasury Regulations Section 1.704-2(b)(1), shall be allocated among the Members in proportion to their Percentage Interests. Partner nonrecourse deductions shall be allocated among the Members in the proportion to which they share the economic risk of loss with respect to the partner nonrecourse debt to which such deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). (iv) If there is a net decrease in the "partnership Company's minimum gain" gain (within the meaning of Treasury Regulations Regulation Section 1.704-2(g)(2)) for a Company taxable year and, at the end of such taxable year, thenthe deficit, before any allocations are made for such year other than those pursuant to clause (ii) aboveif any, each Member with in a Member's Capital Account exceeds his allocable share of the partnership such minimum gain at the beginning gain, gross income of the year Company shall be allocated items of Company income and gain for to such year (and, if necessary for subsequent years) Member in an amount equal to each Member's share of the net decrease in partnership minimum gain as determined in accordance with Treasury Regulations Section 1.704-2(f) in a manner such excess so as to satisfy the requirements of said Treasury RegulationRegulation Section 1.704-2(f) (minimum gain chargeback). (viv) If, during any taxable year, there is a net decrease in partner Company minimum gain attributable to Member nonrecourse debt minimum gaindebt, then, before any other allocations are made for such year other than those pursuant to clause (ii) above, each Member with a share of the partner Company minimum gain attributable to Member nonrecourse debt minimum gain at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each Member's share of the net decrease in partner minimum gain attributable to Member nonrecourse debt minimum gain as determined in accordance with Treasury Regulations Regulation Section 1.704-2(i)(4) in a manner so as to satisfy the requirements of said Treasury Regulation. (viv) If, during any taxable year, a Member unexpectedly receives, or, as of the end of such year, is reasonably expected to receive, receives an adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Regulation Section 1.704-1(b)(2)(ii)(d), and if such adjustment, allocation or distribution would cause at the end of the taxable year a deficit balance in such Member's Capital Account in excess of his allocable share of minimum gain as described above, then such Member shall be allocated items of income and gain for suchsuch taxable year (and, if necessary, subsequent taxable years) in an amount and in a manner sufficient to eliminate such excess balance as quickly as possible before any other allocation is made for such year, other than pursuant to clause (iii) and (iv) above, so as to satisfy the requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) (qualified income offset). (vi) In the event any Member has a deficit balance in his Capital Account at the end of the Fiscal Year which is in excess of the sum of (A) the amount such Member is obligated to restore pursuant to any provision of this Agreement, if any, and (B) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible.

Appears in 1 contract

Samples: Operating Agreement (Imax Corp)

Special Rules Regarding Allocations. Notwithstanding the foregoing provisions of Sections 6.1(a) and 6.1(b):SECTION 6.1: (i) In accordance with sections 704(b) and (c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any Property contributed to the capital of the Company (including all or part of any deemed capital contribution under section 708 of the Code) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company and its agreed value. As provided for by Treasury Regulations Section 1.704-3(a)(3)(i), with respect to any Property which is deemed to be contributed by the Company to the "new" Company by virtue of the Company's deemed liquidation under Section 708(b)(1)(B) of the Code, the allocations described in the previous sentence shall only be required with respect to, and to the extent that, such allocations would have otherwise been required without regard to the effects of the deemed liquidation. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulations Section Regulation section 1.704-1(b)(2) to reflect the fair market value of any of the Property, subsequent allocations of income, gain, loss and deduction with respect to such asset shall, solely for tax purposes, take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under section 704(c) of the Code and the Treasury Regulations thereunder. (ii) At no time shall any allocation of losses be made to a Member if such allocation would cause the deficit in the Member's Capital Account, if any, to exceed his "partnership Company minimum gain" or "partner nonrecourse Member non-recourse debt minimum gain" (as defined in Treasury Regulations Regulation Sections 1.704-2(b)(2) and (g)(1) and (i)(2) and (5), respectively), and any losses not allocated to a Member by reason of this clause (ii) shall be allocated to each Member whose deficit, if any, in the Member's Capital Account of such Member shall not exceed his allocable share of such minimum gain by reason of such allocation, or to the Members who bear the economic risk of loss attributable to such losses, and subsequent profits shall be allocated to Members to the extent losses have previously been allocated to them pursuant to this Section 6.1(c)(iiSECTION 6.1(C)(II). (iii) Nonrecourse Non-recourse deductions, as defined in Treasury Regulations Section 1.704-2(b)(12(b), shall be allocated among the Members in proportion to their Percentage Interests. Partner nonrecourse Member non-recourse deductions shall be allocated among the Members in the proportion to which they share the economic risk of loss with respect to the partner nonrecourse Member non-recourse debt to which such deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). (iv) If there is a net decrease in the "partnership Company minimum gain" gain (within the meaning of Treasury Regulations Regulation Section 1.704-2(g)(2)) for a Company taxable year, then, before any allocations are made for such year other than those pursuant to clause (ii) above, each Member with a share of the partnership Company minimum gain at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary for subsequent years) in an amount equal to each Member's share of the net decrease in partnership Company minimum gain as determined in accordance with Treasury Regulations Regulation Section 1.704-2(f) in a manner so as to satisfy the requirements of said Treasury Regulation. (v) If, during any taxable year, there is a net decrease in partner nonrecourse Member non-recourse debt minimum gain, then, before any other allocations are made for such year other than those pursuant to clause (ii) above, each Member with a share of the partner nonrecourse Member non-recourse debt minimum gain at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each Member's share of the net decrease in partner nonrecourse Member non-recourse debt minimum gain as determined in accordance with Treasury Regulations Regulation Section 1.704-2(i)(4) in a manner so as to satisfy the requirements of said Treasury Regulation. (vi) If, during any taxable year, a Member unexpectedly receives, or, as of the end of such year, is reasonably expected to receive, an adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Regulation Section 1.704-1(b)(2)(ii)(d), and if such adjustment, allocation or distribution would cause at the end of the taxable year a deficit balance in such Member's Capital Account in excess of his allocable share of minimum gain as described above, then such Member shall be allocated items of income and gain for suchsuch taxable year (and, if necessary, subsequent taxable years) in an amount and in a manner sufficient to eliminate such excess balance as quickly as possible before any other allocation is made for such year, other than pursuant to clause (ii) and (iii) above, so as to satisfy the requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) (qualified income offset). (vii) In the event any Member has a deficit balance in his Capital Account at the end of the fiscal year which is in excess of the sum of (A) the amount such Member is obligated to restore pursuant to any provision of this Agreement, if any, and (B) the amount of such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible.

Appears in 1 contract

Samples: Operating Agreement (Mack Cali Realty Corp)

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Special Rules Regarding Allocations. Notwithstanding the foregoing preceding provisions of Sections 6.1(a) and 6.1(b):this Article VI: (i) In accordance with sections 704(b) and (c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any Property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such Property to the Company and its agreed value. As provided for by Treasury Regulations Section 1.704-3(a)(3)(i), with respect to any Property which is deemed to be contributed by the Company to the "new" Company by virtue of the Company's deemed liquidation under Section 708(b)(1)(B) of the Code, the allocations described in the previous sentence shall only be required with respect to, and to the extent that, such allocations would have otherwise been required without regard to the effects of the deemed liquidation. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2) to reflect the fair market value of any Property, subsequent allocations of income, gain, loss and deduction with respect to such asset shall, solely for tax purposes, take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under section 704(c) of the Code and the Treasury Regulations thereunder. (ii) At no time shall any allocation of losses Net Loss be made to a Member if such allocation would cause the deficit in the Member's Capital AccountAccount balance, if any, to exceed his its allocable share of "partnership minimum gain" or "minimum gain attributable to partner nonrecourse debt minimum gaindebt" (as defined in Treasury Regulations Sections 1.704-2(b)(22(g)(1) and (g)(1) and (i)(2) and (5i)(5), respectively), and any losses Net Losses not allocated to a Member by reason of this clause (ii) shall be allocated to each other Member whose deficit, if any, in the Member's Capital Account of such Member shall would not exceed his its allocable share of such minimum gain by reason of such allocation, or to the Members who bear the economic risk of loss attributable to such losses, and subsequent profits shall be allocated to Members to the extent losses have previously been allocated to them pursuant to this Section 6.1(c)(ii). (iii) Nonrecourse deductions, as defined in Treasury Regulations Section 1.704-2(b)(1), shall be allocated among the Members in proportion to their Percentage Interests. Partner nonrecourse deductions shall be allocated among the Members in the proportion to which they share the economic risk of loss with respect to the partner nonrecourse debt to which such deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). (ivii) If there is a net decrease in the "partnership minimum gain" (within the meaning of Treasury Regulations Section 1.704-2(g)(2)) for a Company taxable year and, at the end of such taxable year, thenthe deficit, before any allocations are made for such year other than those pursuant to clause (ii) aboveif any, each Member with in a Member's Capital Account balance exceeds its allocable share of the partnership such minimum gain at the beginning gain, gross income of the year Company shall be allocated items of Company income and gain for to such year (and, if necessary for subsequent years) Member in an amount equal to each Member's share such excess so as to satisfy the requirements of the net decrease in partnership minimum gain as determined in accordance with Treasury Regulations Section 1.704-2(f) in a manner so as to satisfy the requirements of said Treasury Regulation(minimum gain chargeback). (viii) If, during any taxable year, there is a net decrease in "partnership minimum gain attributable to partner nonrecourse debt minimum gaindebt" within the meaning of the Treasury Regulations, then, before any other allocations are made for such year other than those pursuant to clause (iiiii) above, each Member with a share of the partner nonrecourse debt such partnership minimum gain at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each such Member's share of the net decrease in partner nonrecourse debt such partnership minimum gain as determined in accordance with Treasury Regulations Section 1.704-2(i)(4) in a manner so as to satisfy the requirements of said Treasury Regulation. (viiv) If, If during any taxable year, year a Member unexpectedly receives, or, as of the end of such year, is reasonably expected to receive, receives an adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d), and if such adjustment, allocation or distribution would cause at the end of the taxable year a deficit balance in such Member's Capital Account in excess of his its allocable share of partnership minimum gain as described above, then such Member shall be allocated items of income and gain for suchsuch taxable year (and, if necessary, subsequent taxable years) in an amount and in a manner sufficient to eliminate such excess balance as quickly as possible before any other allocation is made for such year, other than pursuant to clause (iii) and (iv) above, so as to satisfy the requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) (qualified income offset). (v) In the event any Member has a deficit balance in its Capital Account at the end of the Fiscal Year which is in excess of the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations

Appears in 1 contract

Samples: Operating Agreement (Aimco Properties Lp)

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