Original Combined Returns Clause Samples

Original Combined Returns. (See generally Ex. 1) A. Net income/loss before § 199 deduction and NOLs: (a) items of income, deduction, loss, capital cost or liability definitely attributable to one Group: allocate to Group and Spinco Group according to actual items attributable to Remainco Group members and Spinco Group members. (b) items of income, deduction, loss, capital cost or liability not directly attributable to one Group: allocate 50/50 to each group. (c) interest and penalties: if attributable to a tax, allocate with the tax; if attributable to a filing obligation, allocate to party with the filing obligation B. 199 deduction: allocate to Remainco Group and Spinco Group in proportion to their relative QPAI C. Consolidated NOLs (current-year or c/f): allocated to offset each Group’s taxable income without regard to which Group generated; no compensation by one Group for use of other Group’s NOLs (See Ex’s 6 & 7) D. Tax before Credits: allocate in proportion to relative taxable income of each Group computed in accordance with A, B and C. If one Group has net loss, all tax allocated to other Group; loss Group is not entitled to compensation for use of its loss. (See Ex. 6)