Common use of Result Clause in Contracts

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.