Tax Allocation Clause Samples
The Tax Allocation clause defines how tax liabilities and responsibilities are distributed between the parties involved in an agreement. Typically, it specifies which party is responsible for paying certain taxes, such as sales, use, or transfer taxes, that may arise from the transaction. For example, in a business sale, the buyer might be responsible for transfer taxes while the seller covers income taxes related to the sale proceeds. This clause ensures clarity and prevents disputes by clearly assigning tax obligations, thereby reducing the risk of unexpected financial burdens for either party.
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Tax Allocation. Prior to the Closing, Seller and Purchaser shall cooperate in good faith to determine a reasonable allocation of the total consideration paid for the Transferred Assets, as finally determined pursuant to Section 2.1(d), Section 2.1(i) and Section 3.3, in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder (the “Purchase Price Allocation”). Seller and Purchaser shall cooperate in good faith to mutually agree to such allocation and shall reduce such agreement to writing, which agreement shall be reflected in an Exhibit 2.1(j) to be approved by Seller and Purchaser prior to Closing. Seller and Purchaser shall jointly and properly execute each party’s respective completed Internal Revenue Service Form 8594, and any other forms or statements required by the Code (or state or local Tax law), Treasury Regulations or the Internal Revenue Service or other Governmental Authority (together with any and all attachments required to be filed therewith), which forms and statements will be prepared in a manner consistent with the Purchase Price Allocation. Seller and Purchaser shall file timely such forms and statements with the Internal Revenue Service or other Governmental Authority. The Purchase Price Allocation shall be appropriately adjusted to take into account any subsequent payments under this Agreement and any other subsequent events required to be taken into account under Section 1060 of the Code. Seller and Purchaser shall not file any Tax Return or other documents or otherwise take any position with respect to Taxes that is inconsistent with the Purchase Price Allocation; provided, however, that neither Seller nor Purchaser shall be obligated to litigate any challenge to such allocation by any Governmental Authority. Seller and Purchaser shall promptly inform one another of any challenge by any Governmental Authority to any allocation made pursuant to this Section 2.1(j) and agree to consult with and keep one another informed with respect to the state of, and any discussion, proposal or submission with respect to, such challenge.
Tax Allocation. (a) Straddle Period Allocation. Purchaser shall be responsible for all taxes payable with respect to the Property that relate to a taxable period (or portion thereof) beginning on or after the Closing Date. With respect to a taxable period that includes, but does not end on, the Closing Date (each such period, a “Straddle Period”), (i) all real property taxes, personal property taxes, and similar ad valorem obligations levied or imposed with respect to the Property for a Straddle Period will be apportioned between Seller and Purchaser based on the number of days of such Straddle Period included in the period ending on (and including) the Closing Date and the number of days of such taxable period included in the period after the Closing Date and (ii) taxes (if any) other than taxes described in clause (i) of this sentence levied or imposed with respect to the Property shall be allocated using a “closing of the books” methodology as of the end of the Closing Date; provided that, (x) exemptions, allowances, or deductions that are calculated on an annual basis shall be allocated between the period ending on the Closing Date and the period beginning subsequent to the Closing Date in proportion to the number of calendar days in each period and (y) the taxable period in respect of a particular real property tax, personal property tax, or any other similar ad valorem obligation shall begin on the date on which ownership of the applicable asset gives rise to the liability for the particular tax and shall end on the day immediately prior to the next such applicable date. If Closing occurs before that year’s tax bills are available, the proration will be based on the most recent tax rate and assessment; provided, after the taxes for the year in which the Closing occurs are finally assessed, upon written demand, Purchaser shall refund to Seller any amount overpaid by Seller or Seller shall pay to Purchaser the amount of any deficiency in the proration in accordance with Section 9.4 (and without duplication of any amounts already taken into account under that section). For the avoidance of doubt, Purchaser shall be responsible for the payment of all ad valorem taxes (including, without limitation, all so-called “roll-back taxes”) which may be levied, assessed, charged or collected by any taxing authority with respect to any change of use of the Property occurring after Closing, whether such taxes or assessments are levied, assessed, charged or collected at Closing or ...
Tax Allocation. The allocation of the Purchase Price for tax purposes shall be set forth in a statement prepared in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended, which statement shall be prepared in a manner generally consistent with the form of Internal Revenue Service Form 8594 and a manner consistent with the Purchase Price allocation provided under Section 1.5. Buyer and Seller shall cooperate in the preparation of such statement of allocation and each party hereto shall file a copy of such statement as, and if, required by applicable law.
Tax Allocation. The allocation of the Purchase Price to the Purchased Assets shall be as set forth in Schedule 5.2 hereto so as to comply with Section 1060 of the Internal Revenue Code of 1986, as amended.
Tax Allocation. For federal, state, and local income tax purposes the income, gains, losses, deductions and credits of the Company, including the character and type thereof, shall be allocated among the Members in the same manner that each such item is allocated among the Capital Accounts
Tax Allocation. For purposes of this Agreement, in the case of a taxable period that begins on or before, and ends after, the Closing Date, Taxes of B▇▇▇▇▇ and SLZ shall be allocated to the portion of the period ending on the Closing Date as follows: (a) all income Taxes, sales Taxes, employment Taxes and other Taxes that are readily apportionable based on an actual or deemed closing of the books shall be allocated based on the amount that would be payable if the taxable year ended on the Closing Date, and (b) all property and other Taxes that are imposed on a periodic basis and not described in clause (a) shall be allocated based on the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the portion of a period ending on the Closing Date and the denominator of which is the number of days in the taxable period, provided that, in the case of any Taxes determined on an arrears basis, such Taxes shall be allocated to the taxable period to which such Taxes relate.
Tax Allocation. Lessee shall be liable for all taxes levied against personal property, trade fixtures and other property placed on the Premises by ▇▇▇▇▇▇, and if any such taxes are levied against Lessor or Lessor’sproperty and Lessor pays the taxes or if the assessed value of Lessor’s property is increased by the placement of such property or trade fixtures of Lessee, and Lessor pays the taxes based on the increased assessment, Lessee shall pay upon demand to Lessor the taxes so levied or that proportion of taxes resulting from the increased assessment. Lessee shall pay all increases in taxes levied or assessed against the land on the building and parking lot are located and said tax shall be prorated on the basis of the number of square feet occupied by ▇▇▇▇▇▇ in the building in relation to the total square footage of the entire building up to a 2% increase per year in accordance with Proposition 13. Lessee shall not be liable for any prorations resulting from sale of the property which result in a higher tax base.
Tax Allocation. 1The income, gains, losses, deductions and credits of the Partnership will be allocated for federal, state and local income tax purposes among the Partners so as to reflect as nearly as possible the allocation of such income, gains, losses, deductions and credits among the Partners for computing their Capital Accounts. Notwithstanding the preceding sentence, if the basis for federal income tax purposes of any property held by the Partnership differs from the basis of such property on the Partnership's books, any gain or loss arising from such property shall be allocated among the Partners so as to take into account the difference between the tax basis and the book basis of such property in any manner authorized by the Treasury Regulations under Section 704(c) of the Code and selected by the General Partner.
Tax Allocation. The portion of any Tax related to a Straddle Period that is allocable to the portion of a Straddle Period ending on and including the Closing Date shall be (i) in the case of property and similar ad valorem Taxes and any other Taxes not described in clause (ii) below, equal to the amount of such Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that fall prior to the day after the Closing Date and the denominator of which is the number of days in the entire Straddle Period and (ii) in the case of Taxes based on income, receipts, remuneration, sales, proceeds, profits or similar items and other Taxes that are readily apportionable based on an actual or deemed closing of the books, computed as if such taxable period ended as of the close of business on the Closing Date. The portion of any Tax related to a Straddle Period that is allocable to the portion of the Straddle Period beginning the day after the Closing Date is the portion of such Tax not allocable to the portion of the Straddle Period ending on and including the Closing Date under this Section 5.7(c). Notwithstanding anything to the contrary in this Agreement, any transaction that occurs on the Closing Date but prior to the actual time of the Closing and that is not in the ordinary course of business shall be deemed to occur in a Pre-Closing Tax Period or the portion of a Straddle Period ending on and including the Closing Date.
Tax Allocation. 6.3.1. For income tax purposes, except as otherwise provided by Laws, all items of income, gain, loss, deduction and credit of the Company for any Fiscal Year shall be allocated among the Members in the same manner that Profits and Losses (and items thereof) are allocated for that year. Any elections or decisions related to tax allocations (to the extent not otherwise provided for in this Section 6) shall be made by the Manager with the consent of all Members in any manner that reasonably reflects the purpose and intention of this Agreement, consistent with applicable Treasury Regulations.
6.3.2. In accordance with Code Section 704(c) and the Treasury Regulations promulgated under the Code, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members, solely for tax purposes, so as to take into account any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value upon contribution.