As stated above, the first step in determining the net income attributable to a particular source is to determine the gross income from that source. The source rules assign gross income to a particular geographic location.
Similar language applies to the other classifications of gross income.
It is difficult and perhaps naive to attempt to generalize about the nature of the federal rules for making geographic assignments of classes of gross income. At the risk of misleading the reader we can, however, offer a few observations. First, logically, there must be some sort of economic or business nexus between the income and the geographic source to which it is assigned. For income derived from tangible property, the source is the location of that property. Intangible property obviously presents special problems here, which are resolved in different ways for different classes of income.