Common use of FACTS Clause in Contracts

FACTS. P owns DE1X and DRCX. DRCX is a member of the P consolidated group and owns FSX. DE1X owns FBX. P’s interest in DE1X and P’s indirect in- terest in FBX are individual separate units that are combined into a single separate unit (Country X separate unit) pursuant to § 1.1503(d)–1(b)(4)(ii). In year 1, DRCX incurs a $200x net operating loss and $200x of income is attributable to P’s Country X separate unit. The $200x net operating loss incurred by DRCX is a dual consolidated loss. FSX also earns $200x of income in year 1. DRCX, DE1X, and FSX file a Country X consolidated tax re- turn. However, Country X has no applicable rules for determining which income is offset by DRCX’s year 1 $200x loss.