Common use of Result Clause in Contracts

Result. Under §§ 1.1503(d)–1(b)(4)(i)(A) and 1.367(a)–6T(g)(1), P’s Country X perma- nent establishment constitutes a foreign branch separate unit. Therefore, the year 1 loss attributable to the foreign branch sepa- rate unit constitutes a dual consolidated loss pursuant to § 1.1503(d)–1(b)(5)(ii). The dual consolidated loss rules apply to the dual con- solidated loss even though there is no affil- iate of the foreign branch separate unit in Country X, because it is still possible that all or a portion of the dual consolidated loss can be put to a foreign use. For example, there may be a foreign use with respect to a Country X affiliate acquired in a year subse- quent to the year in which the dual xxxxxxx- dated loss was incurred. See § 1.1503(d)– 6(a)(2). Accordingly, unless an exception under § 1.1503(d)–6 applies (such as a domestic use election), the year 1 dual consolidated loss attributable to P’s Country X perma- nent establishment is subject to the domes- tic use limitation rule of § 1.1503(d)–4(b). As a result, pursuant to § 1.1503(d)–4(c), the year 1 dual consolidated loss cannot offset income of P that is not attributable to its Country X foreign branch separate unit, nor can it offset income of any other domestic affiliate. The loss can, however, offset income of the Country X foreign branch separate unit, sub- ject to the application of § 1.1503(d)–4(c). The result would be the same even if Country X did not have a consolidation regime that in- cludes as members of consolidated groups Country X branches or permanent establish- ments of nonresident corporations. The dual consolidated loss rules apply even in the ab- sence of a consolidation regime in the for- eign country because it is possible that all or a portion of a dual consolidated loss can be put to a foreign use by other means, such as through a sale, merger, or similar trans- action. See § 1.1503(d)–6(a)(2).