Are Short-Term Capital Gains Allocated as Ordinary Income Where LLC Agreement Does Not Say? Court of Federal Claims Says No

摘要

Imprimis Investors LLC v. U.S. emphasizes how important it is to ascertain and express the parties' intentions in the agreement from the start. Many questions can develop in providing for special allocations in LLC and partnership agreements, including the following ones: whether an allocation of "ordinary income" includes "short-term capital gains" or an allocation of depreciation includes the bonus depreciation in addition to the standard depreciation. All these terms should be defined for the actual business and tax results to occur that the parties wanted.