Common use of Result Clause in Contracts

Result. In general, under section 381, P would succeed to, and be permitted to use, DRCX’s net operating loss carryover. How- ever, § 1.1503(d)–4(d)(1)(i) prohibits the dual consolidated loss of DRCX from carrying over to P. Therefore, DRCX’s year 1 net operating loss carryover is eliminated. Example 21. Dual consolidated loss limitation applied to a separate unit transferred in a sec- tion 381 transaction. (i) Facts. S owns DE1X which, in turn, owns FBX. S’s interest in DE1X and its indirect interest in FBX are combined and treated as a single separate unit (Country X separate unit) pursuant to § 1.1503(d)–1(b)(4)(ii). In year 1, a dual xxxxxxx- dated loss is attributable to the Country X separate unit, and P does not make a domes- tic use election with respect to such loss. Under § 1.1503(d)–4(b), the year 1 dual xxxxxxx- dated loss attributable to the Country X sep- arate unit may not be used to offset the in- come of P or S (other than income attrib- utable to the Country X separate unit, sub- ject to the application of § 1.1503(d)–4(c)) on the group’s consolidated U.S. income tax re- turn (nor may it be used to offset the income of any other domestic affiliates). At the be- ginning of year 2, S transfers its entire inter- est in DE1X, and thus its entire indirect in- terest in FBX, to FSX in a transaction de- scribed in section 381.