Source: https://irc.bloombergtax.com/public/uscode/doc/irc/863
Timestamp: 2020-04-04 21:43:34
Document Index: 695189881

Matched Legal Cases: ['§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863', '§ 863']

Internal Revenue Code, § 863. Special Rules For Determining Source
I.R.C. § 863(a) Allocation Under Regulations —
I.R.C. § 863(b) Income Partly From Within And Partly From Without The United States —
In the case of gross income derived from sources partly within and partly without the United States, the taxable income may first be computed by deducting the expenses, losses, or other deductions apportioned or allocated thereto and a ratable part of any expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income; and the portion of such taxable income attributable to sources within the United States may be determined by processes or formulas of general apportionment prescribed by the Secretary. Gains, profits, and income—
I.R.C. § 863(b)(1) —
from services rendered partly within and partly without the United States,
I.R.C. § 863(b)(2) —
from the sale or exchange of inventory property (within the meaning of section 865(i)(1)) produced (in whole or in part) by the taxpayer within and sold or exchanged without the United States, or produced (in whole or in part) by the taxpayer without and sold or exchanged within the United States, or
I.R.C. § 863(b)(3) —
derived from the purchase of inventory property (within the meaning of section 865(i)(1)) within a possession of the United States and its sale or exchange within the United States, shall be treated as derived partly from sources within and partly from sources without the United States.
Gains, profits, and income from the sale or exchange of inventory property described in paragraph (2) shall be allocated and apportioned between sources within and without the United States solely on the basis of the production activities with respect to the property.
I.R.C. § 863(c) Source Rule For Certain Transportation Income
I.R.C. § 863(c)(1) Transportation Beginning And Ending In The United States —
I.R.C. § 863(c)(2) Other Transportation Having United States Connection
I.R.C. § 863(c)(2)(A) In General —
50 percent of all transportation income attributable to transportation which—
I.R.C. § 863(c)(2)(A)(i) —
is not described in paragraph (1), and
I.R.C. § 863(c)(2)(A)(ii) —
begins or ends in the United States, shall be treated as from sources in the United States.
I.R.C. § 863(c)(2)(B) Special Rule For Personal Service Income —
Subparagraph (A) shall not apply to any transportation income which is income derived from personal services performed by the taxpayer, unless such income is attributable to transportation which—
I.R.C. § 863(c)(2)(B)(i) —
begins in the United States and ends in a possession of the United States, or
I.R.C. § 863(c)(2)(B)(ii) —
begins in a possession of the United States and ends in the United States.
I.R.C. § 863(c)(3) Transportation Income —
For purposes of this subsection, the term “transportation income” means any income derived from, or in connection with—
I.R.C. § 863(c)(3)(A) —
the use (or hiring or leasing for use) of a vessel or aircraft, or
I.R.C. § 863(c)(3)(B) —
the performance of services directly related to the use of a vessel or aircraft.
For purposes of the preceding sentence, the term “vessel or aircraft” includes any container used in connection with a vessel or aircraft.
I.R.C. § 863(d) Source Rules For Space And Certain Ocean Activities
I.R.C. § 863(d)(1) In General —
Except as provided in regulations, any income derived from a space or ocean activity—
I.R.C. § 863(d)(1)(A) —
if derived by a United States person, shall be sourced in the United States, and
I.R.C. § 863(d)(1)(B) —
if derived by a person other than a United States person, shall be sourced outside the United States.
I.R.C. § 863(d)(2) Space Or Ocean Activity —
I.R.C. § 863(d)(2)(A) In General —
The term “space or ocean activity” means—
I.R.C. § 863(d)(2)(A)(i) —
any activity conducted in space, and
I.R.C. § 863(d)(2)(A)(ii) —
any activity conducted on or under water not within the jurisdiction (as recognized by the United States) of a foreign country, possession of the United States, or the United States.
I.R.C. § 863(d)(2)(B) Exception For Certain Activities —
The term “space or ocean activity” shall not include—
I.R.C. § 863(d)(2)(B)(i) —
any activity giving rise to transportation income (as defined in section 863(c)),
I.R.C. § 863(d)(2)(B)(ii) —
any activity giving rise to international communications income (as defined in subsection (e)(2)), and
I.R.C. § 863(d)(2)(B)(iii) —
any activity with respect to mines, oil and gas wells, or other natural deposits to the extent within the United States or any foreign country or possession of the United States (as defined in section 638).
I.R.C. § 863(e) International Communications Income
I.R.C. § 863(e)(1) Source Rules
I.R.C. § 863(e)(1)(A) United States Persons —
I.R.C. § 863(e)(1)(B) Foreign Persons
I.R.C. § 863(e)(1)(B)(i) In General —
I.R.C. § 863(e)(1)(B)(ii) Special Rule For Income Attributable To Office Or Fixed Place Of Business In The United States —
I.R.C. § 863(e)(2) Definition —
For purposes of this section, the term “international communications income” includes all income derived from the transmission of communications or data from the United States to any foreign country (or possession of the United States) or from any foreign country (or possession of the United States) to the United States.
(Aug. 16, 1954, ch. 736, 68A Stat. 277 ; Oct. 4, 1976, Pub. L. 94-455, title XIX, Sec. 1901(b)(26)(C), (D), 1906(b)(13)(A), 90 Stat. 1798, 1799, 1834; July 18, 1984, Pub. L. 98-369, div. A, title I, Sec. 124(a), 98 Stat. 646; Oct. 22, 1986, Pub. L. 99-514, title XII, Sec. 1211(b)(1)(A), 1212(a), (e), 1213(a), 100 Stat. 2536, 2539, 2540; Nov 10, 1988, Pub. L. 100-647, title I, Sec. 1012(e)(3)(A), (f), 102 Stat. 3500; Dec. 19, 1989, Pub. L. 101-239, title VII, Sec. 7811(i)(2), 103 Stat. 2409; Pub. L. 105-34, title XI, Sec. 1174(a)(2), Aug. 5, 1997, 111 Stat 788; Pub. L. 115-97, title I, Sec. 14303(a), Dec. 22, 2017, 131 Stat. 2054.)
2017--Subsec. (b). Pub. L. 115-97, Sec. 14303(a), amended subsec. (b) by adding the sentence at the end.”
1997--Subsec. (c)(2)(B). Pub. L. 105-34, Sec. 1174(a)(2) added a new sentence at the end of subparagraph (B).
1989 - Subsec. (b)(2), (3). Pub. L. 101-239 substituted ‘865(i)(1)’ for ‘865(h)(1)’.
1988 - Pub. L. 100-647, Sec. 1012(e)(3)(A), substituted ‘Special rules for determining source’ for ‘Item not specified in section 861 or 862’ in section catchline.
Subsec. (e)(2). Pub. L. 100-647, Sec. 1012(f), substituted ‘foreign country (or possession of the United States)’ for ‘foreign country’ in two places.
1986 - Subsec. (b)(1). Pub. L. 99-514, Sec. 1212(e), substituted ‘services’ for ‘transportation or other services’.
Subsec. (b)(2), (3). Pub. L. 99-514, Sec. 1211(b)(1)(A), substituted ‘inventory property (within the meaning of section 865(h)(1))’ for ‘personal property’.
Subsec. (c)(2). Pub. L. 99-514, Sec. 1212(a), amended par. (2) generally, in subpar. (A) substituting provisions relating to other transportation having United States connections for provisions relating to transportation between United States and any possession, and in subpar. (B) substituting provisions relating to special rule for personal service income for provisions relating to special rule for certain lessors of aircraft.
Subsecs. (d), (e). Pub. L. 99-514, Sec. 1213(a), added subsecs. (d) and (e).
1984 - Subsec. (c). Pub. L. 98-369 added subsec. (c).
Subsec. (b). Pub. L. 94-455, Sec. 1901(b)(26)(C), (D), 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’ in introductory provisions, and inserted ‘or exchange’ after ‘sale’ in pars. (2) and (3), and ‘or exchanged’ after ‘sold’ in par. (2) wherever appearing.
Section 1174(c)(1) of Pub. L. 105-34 provided that:
“In general.--The amendments made by this section shall apply to remuneration for services performed in taxable years beginning after December 31, 1997.”
Section 1174(c)(2) provided the following exception:
“Presence.--the amendment made by subsection (b) shall apply to taxable years beginning after December 31, 1997 [enacted: Aug. 5, 1997].”
Amendment by Pub. L. 115-97, Sec. 14303(a), effective for taxable years beginning after December 31, 2017.
Amendment by section 1211(b)(1)(A) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, except as otherwise provided, see section 1211(c) of Pub. L. 99-514, set out as an Effective Date note under section 865 of this title.
Section 1212(f) of Pub. L. 99-514 provided that:
‘(1) In general. - Except as provided in paragraph (2), the amendments made by this section (enacting section 887 of this title and amending this section and sections 861, 872, and 883 of this title) shall apply to taxable years beginning after December 31, 1986.
‘(2) Special rule for certain leased property. - The amendments made by subsections (a) and (d) (amending this section and section 861 of this title) shall not apply to any income attributable to property held by the taxpayer on January 1, 1986, if such property was first leased by the taxpayer before January 1, 1986, in a lease to which section 863(c)(2)(B) or 861(e) of the Internal Revenue Code of 1954 (now 1986) (as in effect on the day before the date of the enactment of this Act (Oct. 22, 1986)) applied.
‘(3) Special rule for certain ships leased by the united states navy. -
‘(A) In general. - In the case of any property described in subparagraph (B), paragraph (2) shall be applied by substituting ‘1987’ for ‘1986’ each place it appears.
‘(B) Property to which paragraph applies. - Property described in this subparagraph consists of 4 ships which are to be leased by the United States Navy and which are the subject of Internal Revenue Service rulings bearing the following dates and which involved the following amount of financing, respectively:
‘March 5, 1986                                        $176,844,000
February 5, 1986                                        64,567,000
April 22, 1986                                          64,598,000
May 22, 1986                                           175,300,000.'
Section 1213(b) of Pub. L. 99-514 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to taxable years beginning after December 31, 1986.’
Section 124(b) of Pub. L. 98-369 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply with respect to transportation beginning after the date of the enactment of this Act (July 18, 1984) in taxable years ending after such date.’
Amendment by section 1901(b)(26)(C), (D) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.
For nonapplication of amendments by sections 1211(b)(1)(A) and 1212(a) of Pub. L. 99-514 to the extent application of such amendments would be contrary to any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100-647 be treated as if it had been included in the provision of Pub. L. 99-514 to which such amendment relates, see section 1012(aa)(3), (4) of Pub. L. 100-647, set out as a note under section 861 of this title.
For allocation and apportionment of qualified research and experimental expenditures for purposes of sections 861 to 863 of this title, see section 4009 of Pub. L. 100-647, set out as a note under section 861 of this title.
For rule governing allocation under subsec. (b) of this section of amounts allowable as a deduction for qualified research and experimental expenditures during taxable years beginning after Aug. 1, 1986, and on or before Aug. 1, 1987, see section 1216 of Pub. L. 99-514, set out as a note under section 861 of this title.
For purposes of subsec. (b) of this section, all amounts allowable as a deduction for qualified research and experimental expenditures are to be allocated to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States for taxable years beginning after Aug. 13, 1983, and on or before Aug. 1, 1986, see section 126 of Pub. L. 98-369, set out as a note under section 861 of this title.