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For purposes of section 864(c)(4)(B), three rules apply in
determining whether the taxpayer has "an office or other fixed
place of business within the United States to which such income,
gain, or loss is attributable". Sec. 864(c)(5).
The first rule is:
in determining whether a nonresident alien individual
or a foreign corporation has an office or other fixed
place of business, an office or other fixed place of
business of an agent shall be disregarded unless such
agent (i) has the authority to negotiate and conclude
contracts in the name of the nonresident alien
individual or foreign corporation and regularly
exercises that authority or has a stock or merchandise
from which he regularly fills orders on behalf of such
individual or foreign corporation, and (ii) is not a
general commission agent, broker, or other agent of
independent status acting in the ordinary course of his
business. * * * [Sec. 864(c)(5)(A).]
The regulations promulgated thereunder are set forth supra pp.
69-72.
The second rule is:
income, gain, or loss shall not be considered as
attributable to an office or other fixed place of
business within the U.S. unless such office or fixed
place of business is a material factor in the
production of such income, gain or loss and such office
or fixed place of business regularly carries on
activities of the type from which such income, gain, or
loss is derived. * * * [Sec. 864(c)(5)(B)]
See also sec. 1.864-6(b)(1), Income Tax Regs. Additionally, the
income, gain, or loss must be "realized in the ordinary course of
the trade or business carried on through that office or other
fixed place of business." Sec. 1.864-6(b)(1), Income Tax Regs.
The regulations provide guidance in applying the material
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