L. Ben Smith & Carol Smith - Page 12

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          included Johnston Island.8                                                  
               Section 1272(a) of the TRA 1986 amended old section 931 to             
          exclude from income, in the case of an individual who is a bona             
          fide resident of a specified possession during the entire taxable           
          year, gross income derived from sources within any such specified           
          possession.  Section 931, as amended by section 1272(a) of the              
          TRA 1986, defines the term “specified possession” to mean only              
          Guam, American Samoa, and the Northern Mariana Islands.  Sec.               
          931(c).                                                                     
               Around 6� months before petitioners signed their 2001 joint            
          return,9 we issued our Opinion in Specking v. Commissioner, 117             

               8Sec. 1.931-1, Income Tax Regs., promulgated under sec. 931            
          prior to its amendment by the TRA 1986 provided in pertinent                
          part:                                                                       
                    � 1.931-1.  Citizens of the United States and                     
               domestic corporations deriving income from sources                     
               within a possession of the United States.                              
                    (a) Definitions.  (1) As used in section 931 and                  
               this section, the term “possession of the United                       
               States” includes American Samoa, Guam, Johnston Island,                
               Midway Islands, the Panama Canal Zone, Puerto Rico, and                
               Wake Island. * * *                                                     
               On Apr. 6, 2005, the Treasury Department promulgated T.D.              
          9194, 2005-20 I.R.B. 1016, which revised sec. 1.931-1, Income Tax           
          Regs., promulgated under old section 931.  Subsequent to that               
          revision, sec. 1.931-1, Income Tax Regs., provides in pertinent             
          part:  “� 1.931-1.  Exclusion of certain income from sources                
          within Guam, American Samoa, or the Northern Mariana Islands.--             
          [Reserved].”                                                                
               9Although the record establishes the date on which petition-           
          ers signed their 2001 joint return, the record does not disclose            
                                                             (continued...)           





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