Free Legal FormsLegal Forms
Need Help Contact Us Find out more about us. Customer/Member Support
  Members Logon
 User Name
 
 Password
Forgot Your Password?
   
Search
View forms index

Do-it-yourself, and save-but be smart about it!

To make sure your goals are not compromised, and that your needs are properly met, All About Forms highly recommends that you have a licensed attorney review any legal documents you plan to use.

Why?

  • To be sure you have the right form for your state or local area.
  • To be sure you have the right form for your unique situation.
  • To be sure you are considering all possible legal ramifications.

Signup now to take advantage of the free consultations with our attorneys and financial experts and have them take a look at what you're planning. Just in case!



Back to Forms for 'Limited Liability Partnerships'.


EXHIBIT D

EXHIBIT D

SPECIAL ALLOCATIONS AS REQUIRED BY THE

INTERNAL REVENUE CODE AND REGULATIONS

 

This Exhibit D is a part of that certain Operating Agreement of __________________, LLC made the ________ day of ______________ (month), _____ (year), and is incorporated therein by reference as if fully set forth therein.

 

1.      Allocation of Taxable Income and Loss:

 

For purposes of this Agreement, net profits or net losses shall be determined as required by the regulations promulgated under Section 704 of the Internal Revenue Code, as it may be amended from time to time.  Taxable Income and Tax Losses of the Company for each fiscal year shall be determined as of the end of each fiscal year and shall be allocated as hereinbelow set forth, and shall be subject to the rules for special allocations set forth in Paragraph 2 hereof.

 

(a)     Taxable Income shall first be allocated to the Members to the extent of, and in proportion to, the excess of prior cumulative allocations of Tax Losses over prior cumulative allocations of Taxable Income.

 

(b)     The balance of Taxable Income shall then be allocated to the Members in proportion to their Capital Accounts.

 

(c)     Tax Losses shall first be allocated to the Members to the extent of, and in proportion to, the excess of prior cumulative allocations of Taxable Income over prior cumulative allocations of Tax Losses.

 

 

(d)     The balance of Tax Losses shall be allocated in proportion to the Capital Contributions of the Members, until any Members Capital Account is reduced to zero (0).

 

(e)     To the extent remaining, Tax Losses shall be allocated to the Members in proportion to their adjusted tax basis in the Company as determined for Federal income tax purposes.

 

(f)      Notwithstanding the foregoing provisions, if Taxable Income to be allocated includes income treated as ordinary income for income tax purposes because it is attributable to the recapture of Depreciation and/or Amortization under Section 1245 or Section 1250 of the Internal Revenue Code, or any other similar provision, such Taxable Income, to the extent it is treated as ordinary income, shall be allocated to and reported by the Members in proportion to their accumulated depreciation allocations, and the Company shall keep records of such allocations.

 

(g)     In the event of a transfer of, or other change in, an interest in the Company during a fiscal year, each item of taxable income or loss shall be prorated in accordance with Section 706 of the Internal Revenue Code, using any convention permitted by law and selected by the Managers.

 

(h)     Notwithstanding any other provisions of this Agreement or of this Exhibit D to the contrary, no allocation of any item of income or loss shall be made to a Member if such allocation would not have economic effect pursuant to Treasury Regulations.  To the extent an allocation cannot be made to a Member due to the application of such Treasury Regulations, such allocation shall be made to the other Members entitled to receive such allocation hereunder.

 

2.      Special Allocations:

 

The following special allocations shall be made in the following order and priority:

 

(a)     Notwithstanding any other provision of this Exhibit D, if there is a net decrease in Company minimum gain during any fiscal year or other period, prior to any other allocation pursuant hereto, each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount and manner required by Treasury Regulation Section 1.704-2(f) or 1.704-2(i).  The items to be so allocated shall be determined in accordance with Treasury Regulation Section 1.704-2.

 

(b)     In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Member (consisting of a pro rata portion of each item of Company income, including gross income, and gain for such year) in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, any deficit in such Member's adjusted capital account created by such adjustments, allocations, or distributions, as quickly as possible.  The foregoing provision is intended to constitute a "qualified income offset" within the meaning of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations, and shall be interpreted consistently with such Regulations.

 

(c)     In the event any Member has a deficit capital account at the end of any Company fiscal year which is in excess of the sum of (i) the amount such Member is obligated to restore pursuant to any provision of this Agreement and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1)and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excesses as quickly as possible, provided that an allocation pursuant to this Exhibit D shall be made only if, and to the extent that, such Member would have a deficit capital account in excess of such sum after all other allocations provided for in this Exhibit D have been made as if this Exhibit D were not in this Agreement.

 

(d)     Notwithstanding any other provision of this Agreement to the contrary, no allocation of any item of income or loss shall be made to a Member if such allocation would not have economic effect pursuant to Treasury Regulation Section 1.704-1(b)(3) and 1.704-2.  To the extent an allocation cannot be made to a Member due to the application of this Section 7.2(d), such allocation shall be made to the other Members entitled to receive such allocation hereunder.

 

(e)     Any allocations of items of income, gain, or loss pursuant to this Exhibit D, Paragraphs 1(a) through 1(d) hereof shall be taken into account in computing subsequent allocations pursuant to this Exhibit, so that the net amount of any items so allocated and the income, losses, and other items allocated to each Member pursuant to this Exhibit, to the extent possible, shall be equal to the net amount that would have been allocated to each Member had no allocations ever been made pursuant to Exhibit D, Paragraphs 1(a) through 1(d) hereof.

 

(f)      In accordance with Code Section 704(c) 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 for Federal income tax purposes and its fair market value at the time of its contribution.  Allocations pursuant to this Exhibit D, Paragraph 2(f) are solely for purposes of Federal, state, and local taxes, and shall not affect, or in any way be taken into account in computing any Members capital account or share of income, loss, other items, or distribution pursuant to any provision of this Agreement. 

 

3.      Elections and Modifications to Allocations:

 

The Managers shall prepare and execute any amendments to this Agreement necessary for the Company to comply with the provisions of Treasury Regulations Sections 1.704-1(b), 1.704-1(c) and 1.704-2 upon the happening of any of the following events:  (i) incurring any liability which constitutes a "nonrecourse liability" as defined in Treasury Regulation Section 1.704-2(b)(3) or a "partnership nonrecourse debt" as defined in Treasury Regulations Section 1.704-2(b)(4);  (ii) a constructive termination of the Company pursuant to Internal Revenue Code Section 708(b)(1)(B); or (iii) the contribution or distribution of any property, other than cash, to or by the Company. 

 

The Managers, in their sole discretion, may cause the Company to elect, pursuant to Section 754 of the Internal Revenue Code, to adjust the basis of the Company assets as provided by Sections 743 or 734 of the Internal Revenue Code and the Treasury Regulations thereunder.  The Company shall make such elections for Federal income tax purposes as may be determined by the Managers, acting in their sole and absolute discretion.

 

 

 



Printer Friendly Version Get RTF Version


   
   

 ©2000-2012 CLC Inc.

 Home | About Us | Contact Us | FAQs | Link to Us
 Legal Information | Privacy Policy
   

Try us out for only $4.95!

Register now







FIFA 14 Coins,FIFA Coins,MMORPG Gold,MMOPRG Game,Wedding Dresses,Evening Dresses,Fashion Guides,Fashion Tips,Healthy Diets,Slimming Equipment,Fashion Bags,Fashion Handbags,Fashion Clothes,Fashion Shoes,FIFA 14 Coins,FIFA Coins,Fashion Jewelry,Fashion Jewellery,Fashion News,Fashion Tips,FIFA 14 Coins,FIFA Coins,Fashion Guides,Fashion Trends,Wedding Dresses,Evening Dresses,Wedding Dresses,Evening Dresses