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Act of 1986, section 861(a) no longer "specifies" gross income
that is derived from the sale of noninventory personal property.
Section 862(a) and (b) provides a substantially identical
provision with respect to income received from sources outside
the United States and related losses. Consequently, the pre-1987
versions of sections 861 and 862 are no longer applicable to
determine the source of gain or loss from the sale of
noninventory personal property.
Respondent's reliance upon our decision in Black & Decker
Corp. v. Commissioner, supra, is similarly misplaced. In Black &
Decker Corp., we determined that the taxpayer's worthless stock
loss from its investment in a foreign subsidiary was to be
allocated against foreign source dividend income and, therefore,
constituted a foreign source loss for purposes of computing the
taxpayer's foreign tax credit limitation. In affirming our
decision, the Court of Appeals for the Fourth Circuit noted that
the relevant transaction was governed by the Internal Revenue
Code of 1954. See Black & Decker Corp. v. Commissioner, 986 F.2d
at 62 n.1. The Court of Appeals stated: "we will discuss and
cite to that act [the 1954 Act] although the Internal Revenue
Code of 1986 now supersedes it." Id.
Section 865, which is applicable to the Paty transaction,
provides that income realized from the sale of noninventory
personal property generally will be sourced at the residence of
the seller. Section 865(j)(1) provides that "The Secretary shall
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