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4(c)(5), Income Tax Regs., is defined as "any bill, note, bond,
debenture, or other evidence of indebtedness, or any evidence of
an interest in, or right to subscribe to or purchase, any of the
foregoing items." Sec. 1.864-4(c)(5)(v), Income Tax Regs.
In the second 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 does not meet the
conditions described supra and therefore is not treated as
effectively connected with the taxpayer’s active conduct of a
banking, financing or similar business in the United States still
"may be effectively connected for the taxable year" with the
conduct of another business by the taxpayer in the United States
pursuant to either the asset-use test or the business-activities
test. Sec. 1.864-4(c)(5)(vi)(a), Income Tax Regs. In the last
category of income, any income, gain, or loss from sources within
the United States (other than dividends or interest from, or gain
or loss from the sale or exchange of, stocks or securities) is
determined to be effectively connected pursuant to either the
asset-use test or business-activities test. Sec. 1.864-
4(c)(5)(vi)(b), Income Tax Regs.
c. Section 864(c)(2)(A) Asset-use Test
The Code provides that one factor to consider in determining
whether income described in section 864(c)(2) is effectively
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