Result Sample Clauses

Result. The term of the Agreement is not extended, and expires on the third anniversary of the Commencement Date. Example 3:

Result. Under §§ 1.1503(d)–1(b)(4)(i)(A) and 1.367(a)–6T(g)(1), P’s Country X perma- nent establishment constitutes a foreign branch separate unit. Therefore, the year 1 loss attributable to the foreign branch sepa- rate unit constitutes a dual consolidated loss pursuant to § 1.1503(d)–1(b)(5)(ii). The dual consolidated loss rules apply to the dual con- solidated loss even though there is no affil- iate of the foreign branch separate unit in Country X, because it is still possible that all or a portion of the dual consolidated loss can be put to a foreign use. For example, there may be a foreign use with respect to a Country X affiliate acquired in a year subse- quent to the year in which the dual ▇▇▇▇▇▇▇- dated loss was incurred. See § 1.1503(d)– 6(a)(2). Accordingly, unless an exception under § 1.1503(d)–6 applies (such as a domestic use election), the year 1 dual consolidated loss attributable to P’s Country X perma- nent establishment is subject to the domes- tic use limitation rule of § 1.1503(d)–4(b). As a result, pursuant to § 1.1503(d)–4(c), the year 1 dual consolidated loss cannot offset income of P that is not attributable to its Country X foreign branch separate unit, nor can it offset income of any other domestic affiliate. The loss can, however, offset income of the Country X foreign branch separate unit, sub- ject to the application of § 1.1503(d)–4(c). The result would be the same even if Country X did not have a consolidation regime that in- cludes as members of consolidated groups Country X branches or permanent establish- ments of nonresident corporations. The dual consolidated loss rules apply even in the ab- sence of a consolidation regime in the for- eign country because it is possible that all or a portion of a dual consolidated loss can be put to a foreign use by other means, such as through a sale, merger, or similar trans- action. See § 1.1503(d)–6(a)(2).

Result. Under § 1.1503(d)–3(c)(3), DRCX’s $200x loss shall be treated as having been made available to offset the $200x of income attributable to P’s Country X separate unit. P’s Country X separate unit is not, under U.S. tax principles, a foreign corporation, and there is no interest in DE1X (which is a hybrid entity) that is not a separate unit. As a result, DRCX’s loss being made available to offset the income attributable to P’s Coun- try X separate unit is not considered a for- eign use of such loss. Therefore, P can make a domestic use election with respect to DRCX’s year 1 dual consolidated loss.

Result. As a result of the transfer of as- sets from P to FSX, a portion of the year 1 dual consolidated loss is available for a for- eign use. This is the case because a portion of the basis in FBX’s assets, which gave rise to depreciation deductions that were taken into account in computing the year 1 dual consolidated loss, will give rise to a depre- ciation deduction under Country X laws that will be available, under U.S. tax principles, to offset the income of FSX, a foreign cor- poration, in year 2. However, the aggregate adjusted basis of all the assets transferred by P to FSX, within the 12-month period ending at the end of year 2, is less than 10 percent of the aggregate adjusted basis of all of FBX’s assets at the beginning of such 12- month period. Moreover, the aggregate ad- justed basis of the assets transferred by P to FSX at any time during the certification pe- riod is less than 30 percent of the aggregate adjusted basis of FBX’s assets held at the end of year 1. In addition, the item of deduction giving rise to the foreign use is being made available solely as a result of the adjusted basis of the transferred assets being deter- mined in whole, or in part, by reference to the adjusted basis of such transferred assets in the hands of FBX. As a result, this transfer will not result in a foreign use pursuant to § 1.1503(d)–3(c)(6).

Result. Because the interest expense on P’s third-party loan is not reflected on the books and records of DE1X, no portion of such expense is attributable to P’s interest in DE1X pursuant to § 1.1503(d)–5(c)(3) for pur- poses of calculating the year 1 dual ▇▇▇▇▇▇▇- dated loss, if any, attributable to such inter- est. In addition, even though P’s interest in DE1X is treated as a separate domestic cor- poration for purposes of determining the amount of income or dual consolidated loss attributable to it pursuant to § 1.1503(d)– 5(c)(1)(ii), such treatment does not cause the interest expense incurred on the loan from P to DE1X that is generally disregarded for U.S. tax purposes to be regarded for purposes of calculating the year 1 dual consolidated loss, if any, attributable to P’s interest in DE1X. As a result, even though the dis- regarded interest expense is reflected on the books and records of DE1X, it is not taken into account for purposes of calculating in- come or a dual consolidated loss. Therefore, there is no dual consolidated loss attrib- utable to P’s interest in DE1X in year 1. Example 24. Dividend income attributable to a separate unit. (i) Facts. P owns DE1X which, in turn, owns FBX. P’s interest in DE1X and its indirect interest in FBX are combined and treated as a single separate unit (Country X separate unit) pursuant to § 1.1503(d)– 1(b)(4)(ii). DE1X owns DE3Y. DE3Y owns the stock of FSX. P’s Country X separate unit would, without regard to year 1 dividend in- come (or related section 78 gross-up) received from FSX, have a dual consolidated loss of $75x in year 1. In year 1, FSX distributes $50x to DE3Y that is taxable as a dividend. DE3Y distributes the same amount to DE1X. P computes foreign taxes deemed paid on the dividend under section 902 of $25x and in- cludes that amount in gross income under section 78.

Result. The PFI or Servicer must obtain and maintain fidelity insurance in its own name for at least $3.5 million with a maximum deductible of $300,000, in addition to the coverage maintained by the parent organization.

Result. The year 1 $25x net loss attrib- utable to P’s interest in the Country X sepa- rate unit constitutes a dual consolidated loss. In addition, even though DE1X has posi- tive income in year 1 for Country X tax pur- poses, P cannot demonstrate that there is no possibility of foreign use with respect to the Country X separate unit’s dual consolidated loss as provided under § 1.1503(d)–6(c)(1)(i). P cannot make such a demonstration because the depreciation expense, an item composing the year 1 dual consolidated loss, is deduct- ible (in a later year) for Country X tax pur- poses and, therefore, may be available to off- set or reduce income for Country X purposes that would constitute a foreign use. For ex- ample, if DE1X elected to be classified as a corporation pursuant to § 301.7701–3(c) of this chapter effective as of the end of year 1, and the deferred depreciation expense were avail- able for Country X tax purposes to offset year 2 income of DE1X, an entity treated as a foreign corporation in year 2 for U.S. tax purposes, there would be a foreign use.

Result. (A) P must compute its taxable income for year 1 without taking into ac- count the $50x dual consolidated loss, pursu- ant to § 1.1503(d)–4(c)(2). Such amount con- sists of a pro rata portion of the expenses that were taken into account in calculating the year 1 dual consolidated loss. Thus, the items of the dual consolidated loss that are not taken into account by P in computing its taxable income are as follows: $25x of ▇▇▇- ary expense ($75x/$150x × $50x); $16.67x of re- search and experimental expense ($50x/$150x × $50x); and $8.33x of interest expense ($25x/ $150x × $50x). The remaining amounts of each of these items, together with the $100x of sales income, are taken into account by P in computing its taxable income for year 1 as follows: $50x of salary expense ($75x ¥ $25x);

Result. In year 1, the dual consolidated loss attributable to P’s interest in DE1X is available to, and in fact does, offset income recognized in Country X and, under U.S. tax principles, the income is considered to be in- come of FRHX, a foreign corporation. Ac- cordingly, pursuant to § 1.1503(d)–3(a)(1), there is a foreign use of the dual ▇▇▇▇▇▇▇- dated loss. Therefore, P cannot make a do- mestic use election with respect to the year 1 dual consolidated loss attributable to its interest in DE1X, as provided under § 1.1503(d)–6(d)(2), and such loss will be sub- ject to the domestic use limitation rule of § 1.1503(d)–4(b).