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to an office or other fixed place of business within the United
States. Sec. 864(c)(4)(B). Excepting foreign source income
deemed effectively connected pursuant to, inter alia, section
864(c)(4)(B), no foreign source income is treated as effectively
connected. Sec. 864(c)(4)(A).
b. Section 1.864-4(c)(5), Income
Tax Regs., Banking Activity Test
Once a taxpayer is determined to be engaged in the active
conduct of a banking business within the meaning of section
1.864-4(c)(5)(i), Income Tax Regs., set forth supra p. 64, then
the income of the taxpayer from sources within the United States
is placed in one of three categories, each of which provides an
effectively connected income test.
In the first category of income,
any dividends or interest from stocks or securities, or
any gain or loss from the sale or exchange of stocks or
securities which are capital assets, which is from
sources within the United States and derived by a
nonresident alien individual or a foreign corporation
in the active conduct during the taxable year of such
banking, financing, or similar business in the United
States shall be treated as effectively connected with
the conduct of that business * * * [Sec. 1.864-
4(c)(5)(ii), Income Tax Regs.]
only if two conditions are met: (1) "the stocks or securities
giving rise to such income, gain, or loss are attributable to the
U.S. office through which such business is carried on", and (2)
the stocks or securities either (a) were acquired in one of three
specified ways, or (b) consist of one of three specified types of
securities. Id. A security for purposes of section 1.864-
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