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States. Thus, the "statutory grouping of gross income" in
this case is gross income from sources without the United
States and the "residual grouping of gross income" is gross
income from sources within the United States. See sec.
1.861-8(a)(4), (f)(1), Income Tax Regs.
The term "gross income from sources without the United
States", the statutory grouping of gross income in this
case, consists of those items of gross income specified in
section 862(a), plus the items of gross income allocated
or apportioned to such sources in accordance with section
863(a). Sec. 1.861-1(a)(2), Income Tax Regs. Similarly,
"gross income from sources within the United States", the
residual grouping of gross income in this case, consists
of those items of gross income specified in section 861(a),
plus the items of gross income allocated or apportioned
to such sources in accordance with section 863(a). Sec.
1.861-1(a)(1), Income Tax Regs.
For example, in the case of interest income, section
861(a)(1) provides that, as a general rule, the interest
on bonds, notes, or other interest-bearing obligations of
residents of the United States, corporate or otherwise,
shall be treated as income from sources within the United
States. See sec. 1.861-2(a), Income Tax Regs. Section
862(a)(1) provides that interest income other than that
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