Substantial Economic Effect definition

Substantial Economic Effect. Requirement. Federal tax law permits the members to agree on how the income of the entity will be allocated among them, but requires that this allocation reflect the economic reality of their business arrangement, as tested under complicated rules (i.e. the “substantial economic effect” test under Treasury regulations 1.704-1(b)). Generally, for an allocation to have economic effect, it must be consistent with the underlying economic arrangement of the partners. The partner must bear the economic benefit, or burden, of the allocation. 8 Local counsel to confirm that this complies with local law. TBD whether a different measure of patronage is appropriate. directed, by the Board, to pay an assessment to cover the loss (resulting in a reduction in current tax liability) or the loss will be carried back or forward. The distribution percentages referred to in this section can be changed for a coming Fiscal Year by the Members.
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Examples of Substantial Economic Effect in a sentence

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Related to Substantial Economic Effect

  • Special Economic Zone means each Special Economic Zone notified under the proviso to sub-section (4) of section 3 and sub-section (1) of section 4 (including Free Trade and Warehousing Zone) and includes an existing Special Economic Zone;

  • Stochastic effect means a health effect that occurs randomly and for which the probability of the effect occurring, rather than its severity, is assumed to be a linear function of dose without threshold. Hereditary effects and cancer incidence are examples of stochastic effects. For purposes of these regulations, "probabilistic effect" is an equivalent term.

  • freezing of economic resources means preventing the use of economic resources to obtain funds, goods or services in any way, including, but not limited to, by selling, hiring or mortgaging them;

  • Regional economic integration organization means an organization constituted by sovereign States of a given region to which its member States have transferred competence in respect of matters governed by this Convention and which has been duly authorized, in accordance with its internal procedures, to sign, ratify, accept, approve or accede to this Convention;

  • Nonstochastic effect means a health effect, the severity of which varies with the dose and for which a threshold is believed to exist. Radiation-induced cataract formation is an example of a nonstochastic effect. For purposes of these regulations, "deterministic effect" is an equivalent term.