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this, the Code has never contained a definition of the
words “trade or business” for general application, and
no regulation has been issued expounding its meaning
for all purposes. Neither has a broadly applicable
authoritative judicial definition emerged. Our task in
this case is to ascertain the meaning of the phrase as
it appears in the sections of the Code with which we
are here concerned. [Commissioner v. Groetzinger, 480
U.S. 23, 26 (1987); fn. refs. omitted.]
Given the lack of a statutory or regulatory definition of
the phrase “active conduct of a trade or business” as used in
section 936(a), we believe it appropriate to construe that phrase
by reference to the Secretary’s definitions of the phrase for
other purposes of the Code, bearing in mind Congress’ intent in
enacting section 936 as reflected in its legislative history.12
Cf. Martin Ice Cream Co. v. Commissioner, 110 T.C. 189, 216
(1998) (Court interpreted the subject phrase for purposes of
section 355 by reference to the definition set forth in the
regulations prescribed under section 355). Our research reveals
that the phrase “active conduct of a trade or business” appears
22 times in the current version of the Internal Revenue Code13
and that the Secretary has issued extensive regulations
interpreting that phrase in three of those sections. First, for
12 Of course, we also bear in mind the Supreme Court’s
interpretation of the phrase “trade or business” as espoused in
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987); to wit, an
activity in which a taxpayer is involved with continuity,
regularity, and a profit-motivated primary purpose.
13 See secs. 30A, 49, 168, 179, 351, 355, 367, 407, 543,
731, 806, 861, 865, 936, 954, 957, 995, 1202, 1298, 1362, 2057,
4001.
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