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substantially lessened because space and ocean income is included
in the separate foreign tax credit limitation for shipping
income, secs. 904(d)(2)(D) and 954(f), flush language, and is
subject to U.S. tax under the subpart F rules, 1986 TRA sec.
1221(c)(2) (which amended the definition of foreign base company
shipping income under section 954(f) to include income from a
space or ocean activity (as defined in section 863(d)(2)). Conf.
Rept. 99-841, supra, at II-600; General Explanation of the Tax
Reform Act of 1986, at 934 (J. Comm. Print 1987) (the 1986
Bluebook).
5. Whether Petitioner’s Income Was Fully or Partially
Sourced in American Samoa
Petitioner performed services for the M/V Sea Encounter in
an American Samoan port or territorial waters 7 days in 1995, 10
days in 1996, and 11 days in 1997, and in international waters
208 days in 1995, 193 days in 1996, and 272 days in 1997.
Respondent concedes that wages earned by petitioner while the M/V
Sea Encounter was in port in American Samoa or within its
territorial waters are American Samoan source income, secs.
861(a)(3), 862(a)(3), and that petitioner may exclude those
amounts from income under section 931(a)(1).
Petitioner contends that the services he performed in
American Samoa were so substantial that, under the facts and
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