Extract to table

investors (up to 25% of commitments may originate from Western Europe and Israel), the structure must minimize the allocation of effectively connected income ("ECI") to such investors, thereby reducing their U

The Fund's structure and partnership agreement must incorporate appropriate tracking, segregation, and reporting mechanisms to ensure compliance

Partnership Tax Allocation Principles The allocation of items of income, gain, loss, deduction, and credit among the partners of the Fund is governed by the partnership agreement (the Limited Partnership Agreement, or "LPA") and must comply with the requirements of IRC §704(b) and the Treasury Regulations thereunder

To have "substantial economic effect," allocations must satisfy two requirements

First, the allocations must have "economic effect," meaning that (a) the partnership maintains capital accounts in accordance with Treasury Regulation §1

704-1(b)(2)(iv), (b) liquidating distributions are made in accordance with positive capital account balances, and (c) any partner with a deficit capital account balance after all adjustments is required to restore that deficit (or, alternatively, the partnership agreement includes a "qualified income offset" provision)