Common use of Example 2 Clause in Contracts

Example 2. Impact of gain recogni- tion event on computation of income—(A) Facts. At the time of the initial trans- fer, the TFD stock has a $50x basis, a $100x fair market value, and a $30x sec- tion 1248 amount. The amount of gain subject to the gain recognition agree- ment is $50x. UST did not make an election under paragraph (c)(2)(vi) of this section with respect to the gain recognition agreement. In year 3, TFC disposes of the TFD stock received in the initial transfer in exchange for $120x cash.