Common use of Tax Accounting Methods; Periods; Elections Clause in Contracts

Tax Accounting Methods; Periods; Elections. (a) The determination of whether to utilize accelerated cost recovery or another method of cost recovery or depreciation, and the selection among any other allowable, alternative tax accounting methods or principles shall be made by the Managing Member and shall be those methods and principles which are determined by them to be appropriate. The Company’s annual financial accounting and tax accounting period shall be the calendar year except as otherwise required by Section 706 of the Code. Subject to the REIT Covenants, the Managing Member may cause the Company to make any election allowable to the Company under the Code, including elections under Section 754 of the Code with respect to the Company distributions described in Section 734 of the Code and with respect to transfers of interests described in Section 743 of the Code, provided all such elections are determined by the Managing Member, in its sole discretion, to be in the best interest of the Members holding a majority of the Units; provided, however, that the Managing Member shall not be required to make an election under Section 754 of the Code, and neither the Company nor the Managing Member shall be held responsible or liable for the failure to make such election. In the event such election is made, all costs and expenses incurred by the Managing Member and the Company in connection with such election, including the fees and expenses of the Company’s accountants and tax advisers, shall be borne by the transferee making such request. (b) The Members intend that, for U.S. federal, state and local income tax purposes, each Preferred Member’s Preferred Units shall be treated as partnership interests entitled to guaranteed payments under Section 707(c) of the Code, as contemplated in Section 3.1(c). The Members agree to take all actions, including the amendment of this Agreement and the execution of other documents, as may be required to qualify for and receive the treatment described in the preceding sentence.

Tax Accounting Methods; Periods; Elections. (a) The Company shall keep its financial accounting records in accordance with the same methods used by the Company for income tax purposes. The determination of whether to utilize accelerated cost recovery or another method of cost recovery or depreciation, and the selection among any other allowable, alternative tax accounting methods or principles shall be made by the Managing Member Managers and shall be those methods and principles which that are determined by them the Managers, in their sole discretion, to be appropriatein the best interests of a majority in interest of the Members. The Company’s annual financial accounting and tax accounting period shall be the calendar year except as otherwise required by Section 706 of the Codeyear. Subject to the REIT Covenants, the Managing Member The Managers may cause the Company to make any election allowable to the Company under the Code, including elections under Section 754 of the Code with respect to the Company distributions described in Section 734 of the Code and with respect to transfers of interests Membership Interests described in Section 743 of the Code, provided that all such elections are determined by the Managing MemberManagers, in its their sole discretion, to be in the best interests of a majority in interest of the Members holding a majority of the UnitsMembers; provided, however, that the Managing Member Managers shall not be required to make an election under Section 754 of the Code, and neither the Company nor the Managing Member Managers shall be held responsible or liable for the failure to make such election. In the event such election is made, all costs and expenses incurred by the Managing Member Managers and the Company in connection with such election, including the fees and expenses of the Company’s accountants and tax advisers, shall be borne by the transferee making such request. (b) The . Adjustments available under Section 743 of the Code as a result of such election shall be taken into account only by the Members intend thataffected thereby, for U.S. federal, state and local on their individual federal income tax purposesreturns, each Preferred Member’s Preferred Units and shall not be treated as partnership interests entitled to guaranteed payments under Section 707(c) taken into account in computing the Net Profits and Net Losses of the Code, as contemplated in Section 3.1(c). The Members agree to take all actions, including the amendment Company for purposes of this Agreement (including, without limitation, a gain on sale, exchange or other disposition of all or substantially all of the Property), or in computing the Capital Account balances of the Members. Adjustments available pursuant to Section 734 of the Code as a result of such election shall be taken into account, for purposes of this Agreement, in determining the Net Profits and Net Losses of the execution Company (including, without limitation, a gain on the sale, exchange or other disposition of other documentsall or substantially all of the Property) and in supplying the Members with the tax information referred to in Section 10.4(b) hereof. In addition, as may each adjustment under Section 734 of the Code attributable to a distribution to a Member shall be required to qualify for and receive the treatment described reflected in its entirety in the preceding sentenceCapital Account of the Member to whom the distribution giving rise to the adjustment was made (as a credit adjustment if the adjustment was a positive one or as a debit adjustment if the adjustment was a negative one).