- 9 - Even if general sourcing rules were applicable in this case to override the plain meaning of section 911 and the regulations, section 863(c) would not apply to petitioner’s situation because his voyages neither began nor ended in the United States or one of its possessions. Rather, section 863(d) would require petitioner to include income earned in international waters as income from “ocean activities” sourced in the United States. See Arnett v. Commissioner, 473 F.3d 790, 797 (7th Cir. 2007), affg. 126 T.C. 89 (2006). Section 863(d) provides, in relevant part, as follows: SEC. 863(d). Source Rules for Space and Certain Ocean Activities.-- (1) In general.--Except as provided in regulations, any income derived from a space or ocean activity-- (A) if derived by a United States person, shall be sourced in the United States * * * * * * * * * * (2) Space or ocean activity.--For purposes of paragraph (1)-- (A) In general.--The term “space or ocean activity” means-- * * * * * * * (ii) any activity conducted on or under water not within the jurisdiction (as recognized by the United States) of a foreign country, possession of the United States, or the United States. * * * * * * *Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 NextLast modified: March 27, 2008