Common use of Result Clause in Contracts

Result. The $50x dividend is reflected on the books and records of DE3Y and, therefore, is attributable to P’s interest in DE3Y pursu- ant to § 1.1503(d)–5(c)(3)(i). In addition, the $25x section 78 gross-up is attributable to P’s interest in DE3Y pursuant to § 1.1503(d)– 5(c)(4)(iv). The distribution of $50x from DE3Y to DE1X is generally disregarded for U.S. tax purposes and, therefore, does not give rise to an item that is taken into account for pur- poses of calculating income or a dual con- solidated loss. This is the case even though the item would be reflected on the books and records of DE1X. In addition, pursuant to § 1.1503(d)–5(c)(1)(iii), each separate unit must calculate its own income or dual ▇▇▇▇▇▇▇- dated loss, and each item of income, gain, de- duction, and loss must be taken into account only once. As a result, the dual consolidated loss of $75x attributable to P’s Country X separate unit in year 1 is not reduced by the amount of dividend income attributable to P’s indirect interest in DE3Y. Example 25. Items reflected on books and records of a combined separate unit. (i) Facts. P owns DE1X which, in turn, owns FBX. P’s in- terest in DE1X and its indirect interest in FBX are combined and treated as a single separate unit (Country X separate unit) pur- suant to § 1.1503(d)–1(b)(4)(ii). The following items are reflected on the books and records of DE1X in year 1: Sales, depreciation ex- pense, a political contribution, royalty ex- pense paid to P, repairs and maintenance ex- pense paid to a third party, and Country X income tax expense. The amount of sales under U.S. tax principles equals the amount of sales reported for accounting purposes. The depreciation expense is calculated on a straight-line basis over the useful life of the asset for accounting purposes, but is subject to accelerated depreciation for U.S. tax pur- poses. In addition, the repairs and mainte- ▇▇▇▇▇ expense, which is deducted when paid for accounting purposes, is properly capital- ized and amortized over five years for U.S. tax purposes. Finally, P elects to claim as a credit under section 901 the Country X in- come tax expense that was paid in year 1.