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compensation for personal services performed in the United States
and is treated as income from sources within the United States.
Sec. 861(a)(3).
(2) Inversat Fund
Petitioners contend that the character of the Inversat Fund
commission is personal services income because such commission is
compensation for investment services. Petitioners contend that
the commission should be treated as income from sources without
the United States because the services relating to the Inversat
Fund commission were provided in Mexico. Petitioners do not
specify the services relating to the Inversat Fund that are
relevant for sourcing purposes.
Respondent contends that the commission should be treated as
income from sources within the United States.
We conclude that LTD’s Inversat Fund commission was
compensation for investment services. The services that LTD
rendered in relation to the Inversat Fund included accepting
clients' deposits, transferring the funds from Inversat Fund to
Inversat REIT, and general investment management, all of which
were performed through the office in San Antonio. In sum, LTD’s
management of the Inversat Fund entailed performing personal
services in San Antonio. Accordingly, we hold that LTD's
Inversat Fund commission is characterized as compensation for
personal services performed in the United States and is treated
as income from sources within the United States. Sec. 861(a)(3).
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