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of “gross income derived in the ordinary course of a trade or
business”. Sec. 1.469-2T(c)(3)(ii), Temporary Income Tax Regs.,
53 Fed. Reg. 5686, 5713 (Feb. 25, 1988). The regulations provide
an exhaustive list of seven sources of income that satisfy the
definition and, as a result, will not be considered portfolio
income.5 See id. The source pertinent to our discussion is
5 Sec. 1.469-2T(c)(3)(ii), Temporary Income Tax Regs., 53
Fed. Reg. 5686, 5713 (Feb. 25, 1988), provides, in pertinent
part:
gross income derived in the ordinary course of a trade
or business includes only--
(A) Interest income on loans and investments made
in the ordinary course of a trade or business of
lending money;
(B) Interest on accounts receivable arising from
the performance of services or the sale of property in
the ordinary course of a trade or business of
performing such services or selling such property, but
only if credit is customarily offered to customers of
the business;
(C) Income from investments made in the ordinary
course of a trade or business of furnishing insurance
or annuity contracts or reinsuring risks underwritten
by insurance companies;
(D) Income or gain derived in the ordinary course
of an activity of trading or dealing in any property if
such activity constitutes a trade or business * * *;
(E) Royalties derived by the taxpayer in the
ordinary course of a trade or business of licensing
intangible property * * *;
(F) Amounts included in the gross income of a
patron of a cooperative * * * by reason of any payment
or allocation to the patron based on patronage
occurring with respect to a trade or business of the
(continued...)
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