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(i) the active
conduct of a trade or
business within a
possession of the United
States, or
(ii) the sale or
exchange of substantially
all of the assets used by
the taxpayer in the
active conduct of such
trade or business, and
(B) the qualified possession
source investment income.
(2) Conditions which must be satisfied.-
-The conditions referred to in paragraph (1)
are:
(A) 3-year period.--If 80
percent or more of the gross income
of such domestic corporation for
the 3-year period immediately
preceding the close of the taxable
year (or for such part of such
period immediately preceding the
close of such taxable year as may
be applicable) was derived from
sources within a possession of the
United States (determined without
regard to section 904(f)); and
(B) Trade or business.--If 75
percent or more of the gross income
of such domestic corporation for
such period or such part thereof
was derived from the active conduct
of a trade or business within a
possession of the United States.
Respondent determined and contends that none of MedChem
P.R.’s taxable income for its fiscal year ended August 31, 1992,
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