TAX PRINCIPLES Clause Samples

TAX PRINCIPLES. The Director shall have sole authority to make all tax elections and other decisions relating to taxes regarding the Company. The Director shall cause the Company to timely elect (such election to be effective from the formation of the Company) under applicable U.S. Treasury regulations to be treated as a partnership for U.S. tax purposes, and to file any required forms (including U.S. Treasury Form 8832) with the applicable taxing authorities. To the extent relevant for U.S. tax purposes, as determined by the Director in its sole discretion: (a) The Company shall maintain capital accounts for its stockholders in accordance with U.S. Treasury Regulation 1.704-1(b); (b) All "profit" or "loss" of the company shall be allocated in accordance with the Stockholders percentage share ownership in the Company, and "profit" or "loss" shall mean the profit or loss of the Company as determined under the capital accounting rules of U.S. Treasury Regulation § 1.704-1(b)(2)(iv) for purposes of adjusting the capital accounts of the Stockholders, including, without limitation, the provisions of paragraphs (b), (f) and (g) of those regulations relating to the computation of items of income, gain, deduction and loss; (c) Notwithstanding the preceding clause (b), the following allocations shall apply: (i) the "qualified income offset" provisions of U.S. Treasury Regulation Section 1.704 1(b)(2)(ii)(d) are incorporated herein by reference and shall apply to adjust the allocation of profit and loss otherwise provided for under clause (b) to the extent provided in that regulation; (ii) the "minimum gain" provisions of U.S. Treasury Regulation Section 1.704 2 are incorporated herein by reference and shall apply to adjust the allocation of profit and loss otherwise provided for under clause (b) to the extent provided in that regulation; (iii) notwithstanding the provisions of clause (b), if during any fiscal year of the Company the allocation of any loss or deduction, net of any income or gain, to a Stockholder would cause or increase a negative balance in a Stockholder’s capital account as of the end of that fiscal year, only the amount of such loss or deduction that reduces the balance to zero shall be allocated to the Stockholder and the remaining amount shall be allocated to the other Stockholders. For purposes of the preceding sentence, a capital account shall be reduced by the adjustments, allocations and distributions described in U.S. Treasury Regulations Sections 1.704-1...

TAX PRINCIPLES. The Member acknowledges that as of the date hereof, the Company is a “disregarded entity” for federal income tax purposes pursuant to Sections 301.7701-2 and 301.7701-3 of the Treasury Regulations (and corresponding provisions of state income tax law). All provisions of the Articles and this Agreement are to be construed so as to preserve that tax status. After the date hereof, if the Company’s classification changes (e.g., through the admission of an additional member) and the Company is deemed to be a partnership for federal income tax purposes, this Agreement shall be amended accordingly to reflect the same.

TAX PRINCIPLES. The determination of “Indemnified Taxes” (including, for purposes of determining Indemnified Taxes subject to indemnification under Article IX) and “Accrued Income Taxes” shall be calculated in accordance with the following assumptions (whether or not the Tax Returns described in Section 6.7(a) are in fact prepared in accordance with these assumptions): (i) in respect of any Straddle Period, in accordance with Section 6.7(b); (ii) by excluding any Taxes incurred by the Company on the Closing Date after the Closing outside the ordinary course of business (other than as explicitly contemplated by this Agreement); and (iii) by excluding any deferred Tax assets and liabilities, and liabilities, accruals or reserves for contingent Taxes or with respect to uncertain Tax positions.