Common use of Tax Return and Tax Basis Capital Account Allocations Clause in Contracts

Tax Return and Tax Basis Capital Account Allocations. 6.2.1. Unless otherwise expressly provided in this Section 6.2, the allocations of the Tax Partnership’s items of income, gain, loss, or deduction for tax return and tax basis capital account purposes shall follow the principles of the allocations under Section 6.1. However, the Tax Partnership’s taxable gain or loss on the taxable disposition of a Tax Partnership property, if any, shall be allocated to the contributing Party to the extent of built-in gain or loss (as defined by Treasury Regulations under Code § 704(c)). 6.2.2. The Parties recognize that under Code § 613A(c)(7)(D) the depletion allowance is to be computed separately by each Party. For this purpose, each Party’s share of the Tax Partnership’s adjusted tax basis in each oil and gas property shall be equal to its contribution to the Tax Partnership’s adjusted tax basis of such property, except that an amount of the depletable tax basis for the properties initially contributed by Xxx equal to the lesser of the Xxx Tax Basis Amount or the Area Three Drilling Carry Obligation shall be allocated to Summit. 6.2.3. Under Code § 613A(c)(7)(D) gain or loss on the disposition of an oil and gas property is to be computed separately by each Party. According to Treas. Reg. § 1.704-1(b)(4)(v), the amount realized shall be allocated as follows: (i) An amount that represents recovery of adjusted simulated depletion basis is allocated (without being credited to the capital accounts) to the Parties in the same proportion as the aggregate simulated depletion basis was allocated to such Parties under Section 6.2.2; and (ii) any remaining realization is allocated in accordance with Section 6.1.6. 6.2.4. Depreciation shall be allocated to each Party in accordance with its contribution to the Tax Partnership’s adjusted tax basis of the depreciable asset, except as otherwise provided in Section 6.1.3.

Tax Return and Tax Basis Capital Account Allocations. 6.2.1. Unless otherwise expressly provided in this Section 6.2, the allocations of the Tax Partnership’s items of income, gain, loss, or deduction for tax return and tax basis capital account purposes shall follow the principles of the allocations under Section 6.1. However, the Tax Partnership’s taxable gain or loss on the taxable disposition of a Tax Partnership property, if any, shall be allocated to the contributing Party to the extent of built-in gain or loss (as defined by Treasury Regulations under Code § 704(c)). 6.2.2. The Parties recognize that under Code § 613A(c)(7)(D) the depletion allowance is to be computed separately by each Party. For this purpose, each Party’s share of the Tax Partnership’s adjusted tax basis in each oil and gas property shall be equal to its contribution to the Tax Partnership’s adjusted tax basis of such property, except that an amount of the depletable tax basis for the properties initially contributed by Xxx equal to the lesser of the Xxx Tax Basis Amount or the Area Three Four Drilling Carry Obligation shall be allocated to Summit. 6.2.3. Under Code § 613A(c)(7)(D) gain or loss on the disposition of an oil and gas property is to be computed separately by each Party. According to Treas. Reg. § 1.704-1(b)(4)(v), the amount realized shall be allocated as follows: (i) An amount that represents recovery of adjusted simulated depletion basis is allocated (without being credited to the capital accounts) to the Parties in the same proportion as the aggregate simulated depletion basis was allocated to such Parties under Section 6.2.2; and (ii) any remaining realization is allocated in accordance with Section 6.1.6. 6.2.4. Depreciation shall be allocated to each Party in accordance with its contribution to the Tax Partnership’s adjusted tax basis of the depreciable asset, except as otherwise provided in Section 6.1.3.

Tax Return and Tax Basis Capital Account Allocations. 6.2.1. Unless otherwise expressly provided in this Section 6.2, the allocations of the Tax Partnership’s items of income, gain, loss, or deduction for tax return and tax basis capital account purposes shall follow the principles of the allocations under Section 6.1. However, the Tax Partnership’s taxable gain or loss on the taxable disposition of a Tax Partnership property, if any, shall be allocated to the contributing Party to the extent of built-in gain or loss (as defined by Treasury Regulations under Code § 704(c)). 6.2.2. The Parties recognize that under Code § 613A(c)(7)(D) the depletion allowance is to be computed separately by each Party. For this purpose, each Party’s share of the Tax Partnership’s adjusted tax basis in each oil and gas property shall be equal to its contribution to the Tax Partnership’s adjusted tax basis of such property, except that an amount of the depletable tax basis for the properties initially contributed by Xxx equal to the lesser of the Xxx Tax Basis Amount or the Area Three Two Drilling Carry Obligation shall be allocated to Summit. 6.2.3. Under Code § 613A(c)(7)(D) gain or loss on the disposition of an oil and gas property is to be computed separately by each Party. According to Treas. Reg. § 1.704-1(b)(4)(v), the amount realized shall be allocated as follows: (i) An amount that represents recovery of adjusted simulated depletion basis is allocated (without being credited to the capital accounts) to the Parties in the same proportion as the aggregate simulated depletion basis was allocated to such Parties under Section 6.2.2; and (ii) any remaining realization is allocated in accordance with Section 6.1.6. 6.2.4. Depreciation shall be allocated to each Party in accordance with its contribution to the Tax Partnership’s adjusted tax basis of the depreciable asset, except as otherwise provided in Section 6.1.3.

Tax Return and Tax Basis Capital Account Allocations. 6.2.1. Unless otherwise expressly provided in this Section 6.2, the allocations of the Tax Partnership’s items of income, gain, loss, or deduction for tax return and tax basis capital account purposes shall follow the principles of the allocations under Section 6.1. However, the Tax Partnership’s taxable gain or loss on the taxable disposition of a Tax Partnership property, if any, shall be allocated to the contributing Party to the extent of built-in gain or loss (as defined by Treasury Regulations under Code § 704(c)). 6.2.2. The Parties recognize that under Code § 613A(c)(7)(D) the depletion allowance is to be computed separately by each Party. For this purpose, each Party’s share of the Tax Partnership’s adjusted tax basis in each oil and gas property shall be equal to its contribution to the Tax Partnership’s adjusted tax basis of such property, except that an amount of the depletable tax basis for the properties initially contributed by Xxx equal to the lesser of the Xxx Tax Basis Amount or the Area Three One Drilling Carry Obligation shall be allocated to Summit. 6.2.3. Under Code § 613A(c)(7)(D) gain or loss on the disposition of an oil and gas property is to be computed separately by each Party. According to Treas. Reg. § 1.704-1(b)(4)(v), the amount realized shall be allocated as follows: (i) An amount that represents recovery of adjusted simulated depletion basis is allocated (without being credited to the capital accounts) to the Parties in the same proportion as the aggregate simulated depletion basis was allocated to such Parties under Section 6.2.2; and (ii) any remaining realization is allocated in accordance with Section 6.1.6. 6.2.4. Depreciation shall be allocated to each Party in accordance with its contribution to the Tax Partnership’s adjusted tax basis of the depreciable asset, except as otherwise provided in Section 6.1.3.