LSI 2010 Real Estate Joint Ventures conference materials.pdf

Brian Todd of Davis Wright Tremaine LLP
Andrew H. Zuccotti of K&L Gates LLP
Regulation Section 1.704-2(i)(4), which are hereby incorporated into this
Agreement by this reference, shall be applied.
Speaker 11: 11
Speaker 12: 11
9.2.3 Qualified Income Offset. In the event that any
Member unexpectedly receives any adjustments, allocations, or
distributions described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5)
or (6), items of Company income and gain shall be specially allocated to
such Member in accordance with Regulation Section 1.704-
(1)(b)(2)(ii)(d).
9.2.4 Nonrecourse Deductions. “Nonrecourse
deductions,” as defined in and determined under Regulation Sections
1.704-2(b)(1) and (c), shall be allocated among the Members in
accordance with their respective Percentage Interests.
9.2.5 Member Nonrecourse Deductions. “Partner
nonrecourse deductions,” as defined in and determined under Regulation
Sections 1.704-2(i)(1) and (2), shall be specially allocated among the
Members in accordance with Regulation Section 1.704-2(i).
9.3 Corrective Allocations. The allocations set forth in
Section 9.2 are intended to comply with certain regulatory requirements
under Code Section 704(b). The parties hereto intend that, to the extent
possible, all allocations made pursuant to such Sections will, over the term
of the Company, be offset either with other allocations pursuant to
Section 9.2 or with special allocations of other items of Company income,
gain, loss, or deduction pursuant to this Section 9.3. Accordingly, the
Board is hereby authorized and directed to make offsetting allocations of
Company income, gain, loss or deduction under this Section 9.3 in
whatever manner it determines is appropriate so that, after such offsetting
special allocations are made (and taking into account the reasonably
anticipated future allocations of income and gain pursuant to
Sections 9.2.1 and 9.2.2), the Capital Accounts of the Members are, to the
extent possible, equal to the Capital Accounts each would have if the
provisions of Section 9.2 were not contained in this Agreement and all
income, gain, loss and deduction of the Company were instead allocated
pursuant to Section 9.1.
9.4 Other Allocation Rules.
9.4.1 General. Except as otherwise provided in this
Agreement, all items of Company income, gain, loss, deduction, credit,
and any other allocations not otherwise provided for shall be divided
among the Members in accordance with their respective Percentage
Interests, or as otherwise may be required under the Code and the
Regulations thereunder.
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Law Seminars International | Real Estate Joint Ventures and Funds | 02/08/10 in Seattle, WA