Common use of Net Profits and Net Losses Clause in Contracts

Net Profits and Net Losses. The taxable income or loss, as the case may be, for a period (or from a transaction) as determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in taxable income or loss) computed with the following adjustments (without duplication): A. Items of gain, loss and deduction (including Depreciation) shall be computed based upon the Carrying Values of the Partnership assets rather than upon the assets' adjusted bases for federal income tax purposes; B. Any tax-exempt income received by the Partnership shall be included as an item of gross income; C. The amount of any adjustments to the Carrying Values of any Partnership assets pursuant to Code Section 734 as provided in Section 1.13(B) or 1.13(C) shall be taken into account but any adjustment pursuant Code Section 743 shall not be taken into account; and D. Any expenditure of the Partnership described in Code Section 705(a)(2)(B) (including any expenditures treated as being described in Code Section 705(a)(2)(B) pursuant to the Regulations) shall be treated as deductible expense. E. Nothwithstanding any other provision of this definition, any items which are specifically allocated pursuant to Section 7.2 shall not be taken into account in computing Net Profits or Net Losses.