Common use of Alternative Facts Clause in Contracts

Alternative Facts. The facts are the same as in paragraph (i) of this Example 19, except that the Country X mirror legislation also applies to losses attributable to DE1X, but the mirror agreement does not apply to such losses. The mirror legislation rule would apply with respect to P’s interest in DE1X and, as a result, there is a deemed for- eign use of the dual consolidated loss attrib- utable to the Country X separate unit and a domestic use election cannot be made for such loss. This is the case even though, pur- suant to § 1.1503(d)–5(c)(4)(ii)(A), P’s interest in DE1X (which is subject to the Country X mirror legislation) does not, as an individual separate unit, have a dual consolidated loss in year 1. Further, the stand-alone exception to the mirror legislation rule in § 1.1503(d)– 3(e)(2) does not apply because, absent the mirror legislation, the Country X combined separate unit’s dual consolidated loss would be available in the year incurred for a for- eign use (as defined in § 1.1503(d)–3) because it could be used to offset income of FSX under the Country X consolidation regime. This is the case even if Country X requires an elec- tion to consolidate and no such election is made. The result would be the same even if Country X did not recognize DE1X as having a loss. Example 20. Dual consolidated loss limitation after section 381 transaction. disposition of as- sets and subsequent liquidation of dual resident corporation. (i) Facts. P owns DRCX, a mem- ber of the P consolidated group. In year 1, DRCX incurs a dual consolidated loss and P does not make a domestic use election with respect to such loss. Under § 1.1503(d)–4(b), DRCX’s year 1 dual consolidated loss is sub- ject to the limitations under § 1.1503(d)–4(c) and, therefore, may not be used to offset the income of P or S (or any other domestic af- filiate) on the group’s U.S. income tax re- turn. At the beginning of year 2, DRCX sells all of its assets for cash and distributes the cash to P pursuant to a liquidation that qualifies under section 332.