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derived from sources within possessions of the United States,
except for Puerto Rico, the U.S. Virgin Islands, or Guam, if
certain conditions were satisfied. Hereinafter, we refer to
section 931 before its amendment by TRA 1986 section 1272(a) as
old section 931. Old section 931 did not define the term
“possession of the United States”. However, regulations
promulgated under old section 931 provide, in pertinent part:
9(...continued)
the conditions of both paragraph (1) and paragraph (2)
are satisfied:
(1) 3-year period.--If 80 percent or more of
the gross income of such citizen (computed without
the benefit of this section) 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; and
(2) Trade or business.--If 50 percent or more
of his gross income (computed without the benefit
of this section) 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 either on his own account or as an
employee or agent of another.
(b) Amounts Received in United States.--
Notwithstanding subsection (a), there shall be included
in gross income all amounts received by such citizens
* * * within the United States, whether derived from
sources within or without the United States.
(c) Definition.--For purposes of this section, the
term “possession of the United States” does not include
the Commonwealth of Puerto Rico, the Virgin Islands of
the United States, or Guam.
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