Formula Test definition

Formula Test. A transfer satisfies the formula test if the present value of the anticipated tax liabilities associated with holding the Certificate does not exceed the sum of (i) the present value of any consideration given to the transferee to acquire the Certificate; (ii) the present value of the expected future distributions on the Certificate; and (iii) the present value of the anticipated tax savings associated with holding the Certificate as the issuing REMIC generates losses. For purposes of applying the Formula Test: (i) The transferee is assumed to pay tax at a rate equal to the highest rate of tax specified in section 11(b)(1) of the Code. If the transferee has been subject to the alternative minimum tax under section 55 of the Code in the preceding two years and will compute its taxable income in the current taxable year using the alternative minimum tax rate, then the tax rate specified in section 55(b)(1)(B) of the Code may be used in lieu of the highest rate specified in section 11(b)(1) of the Code; (ii) The transfer must satisfy paragraph 9 of the Transfer Affidavit; and (iii) Present values are computed using a discount rate equal to the Federal short-term rate prescribed by section 1274(d) of the Code for the month of the transfer and the compounding period used by the taxpayer.
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Formula Test. A transfer satisfies the formula test if the present value of the anticipated tax liabilities associated with holding the Certificate does not exceed the sum of (i) the present value of any consideration given to the transferee to acquire the Certificate; (ii) the present value of the expected future distributions on the Certificate; and (iii) the present value of the anticipated tax savings associated with holding the Certificate as the issuing REMIC generates losses. For purposes of applying the Formula Test: (i) The transferee is assumed to pay tax at a rate equal to the highest rate of tax specified in section 11(b)(1) of the Code. If the transferee has been subject to the alternative minimum tax under section 55 of the Code in the preceding two years and will compute its taxable income in the current taxable year using the alternative minimum tax rate, then the tax rate specified in section 55(b)(1)(B) of the Code may be used in lieu of the highest rate specified in section 11(b)(1) of the Code;
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Examples of Formula Test in a sentence

  • If Borrowers and their Subsidiaries fail to meet the Formula Test, a Trigger Event shall not occur if Platinum or one of its Affiliates makes a Subordinated Loan to PNA within thirteen (13) Business Days after notice from Administrative Agent of such failure (the “Cure Period”).

Related to Formula Test

  • Performance Test means all operational checks and tests required to determine the performance parameters including inter-alia capacity, efficiency and operating characteristics of the Stores as specified in the Contract.

  • Test means such test as is prescribed by the particulars or considered necessary by the Inspecting Officer whether performed or made by the Inspecting Officer or any agency acting under the direction of the Inspecting Officer;

  • Start-Up Testing means the completion of applicable required factory and start-up tests as set forth in Exhibit C.

  • Class C Par Value Test means the test which will be satisfied as of any Measurement Date if, on such Measurement Date, the Class C Par Value Ratio is at least equal to the percentage specified in the definition of "Coverage Test".

  • Commissioning test means tests applied to the Generating Facility, after completion of the construction of the Generating Facility, in order to verify that the Generating Facility may be released for Operation.

  • Minimum Weighted Average Coupon Test means a test that will be satisfied on any Measurement Date if the Weighted Average Coupon equals or exceeds 7.0%.

  • Asset Test means, for an Asset Review, each Test, as defined in the Asset Representations Review Agreement, in Schedule A to the Asset Representations Review Agreement to be performed by the Asset Representations Reviewer on the related Asset Review Receivables.

  • Borrowing Base Test means a test that will be satisfied on any date of determination if the following is true: Where: AR =57%.

  • Coverage Test means each of the Class A/B Par Value Test, the Class A/B Interest Coverage Test, the Class C Par Value Test, the Class C Interest Coverage Test, the Class D Par Value Test, the Class D Interest Coverage Test, the Class E Par Value Test and the Class E Interest Coverage Test.

  • Class D Par Value Test means the test which will be satisfied as of any Measurement Date if, on such Measurement Date, the Class D Par Value Ratio is at least equal to the percentage specified in the definition of "Coverage Test".

  • Class C Coverage Tests means the Class C Interest Coverage Test and the Class C Par Value Test.

  • Incurrence Test means the incurrence test set out in Clause 12.1 (Incurrence Test).

  • Delinquency Test means, for any Payment Date, a test that will be satisfied if

  • Minimum Weighted Average Spread Test means a test that will be satisfied on any date of determination if the Weighted Average Spread of all Eligible Collateral Obligations included in the Collateral on such day is equal to or greater than 5.25%.

  • Performance Tests means the tests to be conducted on the equipment at site for checking the performance parameters of the equipment as defined in Technical Specification.