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held that the trust was part of the State government and that its
investment income was excludable under section 115(i).
We recognize that each of the foregoing cases involves
different circumstances so that it can be argued that each case
is distinguishable. However, we think the most significant
single element is that in none of them did the court feel
compelled to reach a different conclusion because a separate
legal entity was involved, the factor upon which respondent
heavily relies. Nor are we persuaded by respondent's efforts to
find support for her position in the application of the
commercial activity exception to the sovereign immunity of a
foreign state under 28 U.S.C. section 1603 (1988). The Egyptian
Government is not a party to this proceeding so that the issue of
sovereign immunity is not involved. Similarly, we are not
impressed with respondent's reliance on Qantas Airways Ltd. v.
United States, 62 F.3d 385 (Fed. Cir. 1995),14 which held that
the plaintiff was not entitled to be treated as part of the
Government of Australia under section 1.892-1(b), Income Tax
Regs.,15 dealing with the exemption of income of foreign
14 See also Rev. Rul. 87-6, 1987-1 C.B. 179.
15 A foreign government is defined in sec. 1.892-1(b), Income
Tax Regs., as follows:
(b) Foreign government defined--(1) Classes of a
foreign government. For purposes of this section, a
foreign government consists only of integral parts or
controlled entities of a foreign sovereign to the
(continued...)
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