2018—Subsec. (a)(2)(A). Pub. L. 115–141 struck out “other than a corporation which has an election in effect under section 936” after “corporation”.
2017—Subsec. (a)(2). Pub. L. 115–97, § 13002(e)(2), substituted “100/65th” for “100/80th” and “100/50th” for “100/70th” in concluding provisions.
Subsec. (a)(2)(B). Pub. L. 115–97, § 13002(e)(1), substituted “100/50th” for “100/70th”.
2010—Subsec. (a)(1). Pub. L. 111–226, § 217(a), redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which read as follows: “interest from a resident alien individual or domestic corporation, if such individual or corporation meets the 80-percent foreign business requirements of subsection (c)(1),”.
Subsec. (a)(9). Pub. L. 111–240 added par. (9).
Subsecs. (c) to (f). Pub. L. 111–226, § 217(c)(1), redesignated subsecs. (d) to (f) as (c) to (e), respectively, and struck out former subsec. (c) which related to foreign business requirements.
2004—Subsec. (a)(1)(C). Pub. L. 108–357 added subpar. (C).
2001—Subsec. (a)(3). Pub. L. 107–16 struck out “except for purposes of sections 79 and 105 and subchapter D,” after “In addition,” in concluding provisions.
1997—Subsec. (a)(3). Pub. L. 105–34 inserted concluding provisions “In addition, except for purposes of sections 79 and 105 and subchapter D, compensation for labor or services performed in the United States shall not be deemed to be income from sources within the United States if the labor or services are performed by a nonresident alien individual in connection with the individual’s temporary presence in the United States as a regular member of the crew of a foreign vessel engaged in transportation between the United States and a foreign country or a possession of the United States.”
1996—Subsec. (e)(1)(A). Pub. L. 104–188 provided that the amendment made by section 11813(b)(17) of Pub. L. 101–508 shall be applied as if the material stricken by such amendment included the closing parenthesis after “section 48(a)(5)”. See 1990 Amendment note below.
1990—Subsec. (a)(1)(A), (B). Pub. L. 101–508, § 11801(a)(29), (c)(14), inserted “and” at end of subpar. (A), substituted a period for a comma at end of subpar. (B), and struck out subpars. (C) and (D) which read as follows:
“(C) interest on a debt obligation which was part of an issue with respect to which an election has been made under subsection (c) of section 4912 (as in effect before
“(D) interest on a debt obligation which was part of an issue which—
“(i) was part of an issue outstanding on
“(ii) was guaranteed by a United States person,
“(iii) was treated under chapter 41 as a debt obligation of a foreign obligor,
“(iv) as of
“(v) when issued, was purchased by one or more underwriters for the purpose of distribution through resale.”
Subsec. (e)(1)(A). Pub. L. 101–508, § 11813(b)(17), which directed the substitution of “which is section 1245 property (as defined in section 1245(a)(3))” for “which is section 38 property (or would be section 38 property but for section 48(a)(5)”, was executed by making the substitution for “which is section 38 property (or would be section 38 property but for section 48(a)(5))”. See 1996 Amendment note above.
Subsec. (e)(2). Pub. L. 101–508, § 11801(c)(6)(C), substituted “all of whose stock is owned by one or more domestic common carriers by railroad” for “referred to in subparagraph (B) of section 184(d)(1)”.
1989—Subsec. (a)(6). Pub. L. 101–239, § 7811(i)(2), substituted “865(i)(1)” for “865(h)(1)”.
Subsec. (e)(1). Pub. L. 101–239, § 7841(d)(9), substituted “section 862(a)” for “section 826(a)” in introductory provisions.
1988—Subsec. (a)(2)(B). Pub. L. 100–647, § 1012(q)(7), substituted “other than income described in section 884(d)(2)” for “other than under section 884(d)(2)” in two places.
Subsec. (a)(2)(C). Pub. L. 100–647, § 1012(q)(15), substituted “section 243(e)” for “section 243(d)”.
Subsec. (a)(6). Pub. L. 100–647, § 1018(u)(39), substituted “inventory property” for “personal property” in heading.
Subsec. (a)(7). Pub. L. 100–647, § 1012(i)(10), amended par. (7) generally. Prior to amendment, par. (7) read as follows: “Amounts received as underwriting income (as defined in section 832(b)(3)) derived from the insurance of United States risks (as defined in section 953(a)).”
Subsec. (c)(1)(B). Pub. L. 100–647, § 1012(g)(3), inserted “or, in the case of a corporation, is attributable to income so derived by a subsidiary of such corporation” after parenthetical in cl. (i), struck out “or chain of subsidiaries of such corporation” after “by a subsidiary” in cl. (ii), and inserted sentence at end defining “subsidiary”.
Subsec. (c)(2)(B)(ii). Pub. L. 100–647, § 1012(i)(14)(B), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “such section shall be applied by substituting ‘10 percent’ for ‘50 percent’ each place it appears.”
Subsec. (f). Pub. L. 100–647, § 1012(g)(9), added subsec. (f).
1987—Subsec. (a)(2). Pub. L. 100–203, § 10221(d)(4)(B), inserted at end “In the case of any dividend from a 20-percent owned corporation (as defined in section 243(c)(2)), subparagraph (B) shall be applied by substituting ‘100/80th’ for ‘100/70th’.”
Subsec. (a)(2)(B). Pub. L. 100–203, § 10221(d)(4)(A), which directed that subpar. (B) be amended by substituting “100/70th” for “100/85th”, was executed by substituting “100/70th” for “100/85ths” to reflect the probable intent of Congress.
1986—Subsec. (a)(1). Pub. L. 99–514, § 1241(b)(1)(A), substituted “noncorporate residents or domestic corporations” for “residents, corporate or otherwise,” in introductory text.
Subsec. (a)(1)(A). Pub. L. 99–514, § 1214(a)(1), (c)(5)(A), amended subpar. (B) generally and redesignated it as (A). Prior to amendment and redesignation, former subpar. (B) read as follows: “interest received from a resident alien individual or a domestic corporation, when it is shown to the satisfaction of the Secretary that less than 20 percent of the gross income from all sources of such individual or such corporation has been derived from sources within the United States, as determined under the provisions of this part, for the 3-year period ending with the close of the taxable year of such individual or such corporation preceding the payment of such interest, or for such part of such period as may be applicable,”. Former subpar. (A), which read “interest on amounts described in subsection (c) received by a nonresident alien individual or a foreign corporation, if such interest is not effectively connected with the conduct of a trade or business within the United States,”, was struck out.
Subsec. (a)(1)(B). Pub. L. 99–514, § 1241(b)(1)(B), redesignated subpar. (D), as previously redesignated and amended by § 1214(c)(5)(A), (B) of Pub. L. 99–514, as (B) and struck out former subpar. (B) [previously (C)] which read as follows: “interest received from a foreign corporation (other than interest paid or credited by a domestic branch of a foreign corporation, if such branch is engaged in the commercial banking business), when it is shown to the satisfaction of the Secretary that less than 50 percent of the gross income from all sources of such foreign corporation for the 3-year period ending with the close of its taxable year preceding the payment of such interest (or for such part of such period as the corporation has been in existence) was effectively connected with the conduct of a trade or business within the United States,”.
Pub. L. 99–514, § 1214(c)(5)(A), (B), redesignated former subpar. (F) as (D), substituted in cl. (ii), “subparagraph (B) of section 871(i)(3)” for “paragraph (2) of subsection (c)”, and redesignated former subpar. (C) as (B). Former subpar. (B) redesignated (A).
Subsec. (a)(1)(C). Pub. L. 99–514, § 1241(b)(1)(B), redesignated subpar. (E), as previously redesignated by § 1214(c)(5)(A) of Pub. L. 99–514, as (C) and struck out former subpar. (C) [previously (D)] which read as follows: “in the case of interest received from a foreign corporation (other than interest paid or credited by a domestic branch of a foreign corporation, if such branch is engaged in the commercial banking business), 50 percent or more of the gross income of which from all sources for the 3-year period ending with the close of its taxable year preceding the payment of such interest (or for such part of such period as the corporation has been in existence) was effectively connected with the conduct of a trade or business within the United States, an amount of such interest which bears the same ratio to such interest as the gross income of such foreign corporation for such period which was not effectively connected with the conduct of a trade or business within the United States bears to its gross income from all sources,”.
Pub. L. 99–514, § 1214(c)(5)(A), redesignated subpar. (D) as (C). Former subpar. (C) redesignated (B).
Subsec. (a)(1)(D). Pub. L. 99–514, § 1214(c)(5)(A), redesignated subpar. (H) as (F). Pub. L. 99–514, § 1241(b)(1)(B), then redesignated such subpar. (F) as (D). The original subpar. (D) was redesignated (C) and struck out, and the original subpar. (F) was redesignated (D), then (B).
Subsec. (a)(1)(E). Pub. L. 99–514, § 1241(b)(1)(B), redesignated subpar. (E), as previously redesignated by § 1214(c)(5)(A) of Pub. L. 99–514, as (C).
Pub. L. 99–514, § 1214(c)(5)(A), redesignated subpar. (G) as (E) and struck out former subpar. (E) which read as follows: “income derived by a foreign central bank of issue from bankers’ acceptances,”.
Subsec. (a)(1)(F). Pub. L. 99–514, §§ 1214(c)(5)(A), 1241(b)(1)(B), redesignated successively former subpar. (F) as (D) and (B), respectively.
Subsec. (a)(1)(G). Pub. L. 99–514, §§ 1214(c)(5)(A), 1241(b)(1)(B), redesignated successively former subpar. (G) as (E) and (C), respectively.
Subsec. (a)(1)(H). Pub. L. 99–514, §§ 1214(c)(5)(A), 1241(b)(1)(B), redesignated successively former subpar. (H) as (F) and (D), respectively.
Subsec. (a)(2)(A). Pub. L. 99–514, § 1214(b), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “from a domestic corporation other than a corporation which has an election in effect under section 936, and other than a corporation less than 20 percent of whose gross income is shown to the satisfaction of the Secretary to have been derived from sources within the United States, as determined under the provisions of this part, for the 3-year period ending with the close of the taxable year of such corporation preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence), or”.
Subsec. (a)(2)(B). Pub. L. 99–514, § 1241(b)(2), substituted “25 percent” for “50 percent” and inserted “(or treated as effectively connected other than under section 884(d)(2))” in two places.
Subsec. (a)(6). Pub. L. 99–514, § 1211(b)(1)(B), substituted “inventory property (within the meaning of section 865(h)(1))” for “personal property”.
Subsec. (b). Pub. L. 99–514, § 104(b)(11), substituted “the standard deduction” for “the zero bracket amount”.
Subsec. (c). Pub. L. 99–514, § 1214(a)(2), amended subsec. (c) generally, substituting provisions relating to foreign business requirements for provisions relating to interest on deposits.
Subsec. (d). Pub. L. 99–514, § 1214(c)(5)(C), amended subsec. (d) generally, substituting provision for special rule for application of subsec. (a)(2)(B) for former provision for special rules for application of subsec. (a), pars. (1)(B) to (1)(D) and (2)(B), pars. (1) and (2) thereof relating to new entities and transition rule provisions.
Subsecs. (e), (f). Pub. L. 99–514, § 1212(d), redesignated subsec. (f) as (e) and struck out former subsec. (e) relating to treatment of income from certain leased aircraft, vessels, and spacecraft as income from sources within the United States.
1983—Subsec. (a)(8). Pub. L. 98–21 added par. (8).
1980—Subsec. (a)(5). Pub. L. 96–499 substituted “Disposition of United States real property interest” for “Sale or exchange of real property” in heading and “disposition of a United States real property interest (as defined in section 897(c))” for “sale or exchange of real property located in the United States” in text.
Subsec. (e). Pub. L. 96–605 substituted provision directing that income from certain leased aircraft, vessels, and spacecraft be treated as income from sources within the United States for provision permitting the taxpayer to elect to treat income from certain aircraft and vessels as income from sources within the United States and prescribing the manner of revocating such an election.
1978—Subsec. (a)(1)(F). Pub. L. 95–600, § 540(a), designated existing provisions as cl. (i) and added cl. (ii).
Subsec. (f). Pub. L. 95–600, § 370(a), added subsec. (f).
1977—Subsec. (b). Pub. L. 95–30 provided that, in the case of an individual who does not itemize deductions, an amount equal to the zero bracket amount shall be considered a deduction which cannot definitely be allocated to some item or class of gross income.
1976—Subsec. (a)(1). Pub. L. 94–455, §§ 1901(c)(7), 1904(b)(10)(B), struck out “, any Territory, any political subdivision of a Territory,” after “United States” in provisions preceding subpar. (A) and, in subpar. (G), substituted “subsection (c) of section 4912 (as in effect before
Subsec. (a)(2)(A). Pub. L. 94–455, §§ 1051(h)(3), 1906(b)(13)(A), substituted “other than a corporation which has an election in effect under section 936” for “other than a corporation entitled to the benefits of section 931” and struck out “or his delegate” after “Secretary”.
Subsec. (a)(2)(D). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (a)(5), (6). Pub. L. 94–455, § 1901(b)(26)(A), substituted “sale or exchange” for “sale” in headings and text.
Subsec. (a)(7). Pub. L. 94–455, § 1036(a), added par. (7).
Subsec. (c)(3). Pub. L. 94–455, § 1041, struck out provision that subsecs. (a)(1)(A) and (c) would cease to apply effective with respect to amounts paid or credited after
Subsec. (e)(1). Pub. L. 94–455, § 1901(b)(26)(B), substituted “sale, exchange, or other disposition” for “sale or other disposition”.
Subsecs. (e)(2), (3). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
1975—Subsec. (a)(1)(H). Pub. L. 93–625, § 9(a), added subpar. (H).
Subsec. (c)(3). Pub. L. 93–625, § 8, substituted “1976” for “1975”.
1971—Subsec. (a)(1)(G). Pub. L. 92–9 added subpar. (G).
Subsec. (a)(2)(D). Pub. L. 92–178, § 503, added subpar. (D).
Subsec. (e). Pub. L. 92–178, § 314(a), added subsec. (e).
1969—Subsec. (a)(1)(C), (D). Pub. L. 91–172, § 435(a)(1), struck out “after
Subsec. (c)(3). Pub. L. 91–172, § 435(a)(2), substituted “1975” for “1972”.
1966—Subsec. (a)(1)(A). Pub. L. 89–809, § 102(a)(1)(A), substituted “interest on amounts described in subsection (c) received by a nonresident alien individual or a foreign corporation, if such interest is not effectively connected with the conduct of a trade or business within the United States” for “interest on deposits with persons carrying on the banking business paid to persons not engaged in business within the United States”.
Subsec. (a)(1)(B). Pub. L. 89–809, § 102(a)(2), struck out interest received from a resident foreign corporation, and substituted “gross income from all sources of such individual or such corporation” for “gross income of such resident payor or domestic corporation”, and “taxable year of such individual or such corporation” for “taxable year of such payor”.
Subsec. (a)(1)(C) to (F). Pub. L. 89–809, § 102(a)(2), added subpars. (C), (D), and (F), and redesignated former subpar. (C) as (E).
Subsec. (a)(2)(B). Pub. L. 89–809, § 102(b), substituted “50 percent of the gross income from all sources” for “50 percent of the gross income”, “effectively connected with the conduct of a trade or business within the United States” for “derived from sources within the United States as determined from the provisions of this part”, and “ratio to such dividends as the gross income of the corporation for such period which was effectively connected with the conduct of a trade or business within the United States bears to its gross income from all sources” for “ratio to such dividends as the gross income of the corporation for such period derived from sources within the United States bears to its gross income from all sources” and inserted “(other than dividends for which a deduction is allowable under section 245(b))” after “dividends” and “(and only to the extent)” after “extent”.
Subsec. (a)(3)(C)(ii). Pub. L. 89–809, § 102(c), inserted “an individual who is a citizen or resident of the United States, a domestic partnership, or” before “a domestic corporation” and “individual, partnership, or” after “United States by such”.
Subsecs. (c), (d). Pub. L. 89–809, § 102(a)(1)(B), (3), added subsecs. (c) and (d).
1962—Subsec. (a)(2)(B). Pub. L. 87–834 substituted “to the extent exceeding the amount which is 100/85ths of the amount of the deduction allowable under section 245 in respect of such dividends” for “to the extent exceeding the amount of the deduction allowable under section 245 in respect of such dividends.”
1960—Subsec. (a)(2)(C). Pub. L. 86–779 added subpar. (C).
Amendment by Pub. L. 115–97 applicable to taxable years beginning after
Pub. L. 111–240, title II, § 2122(d),
Pub. L. 111–226, title II, § 217(d), “(1) Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 871, 904, and 2104 of this title] shall apply to taxable years beginning after “(2) “(A) The amendments made by this section shall not apply to payments of interest on obligations issued before the date of the enactment of this Act [“(B) Subparagraph (A) shall not apply to any interest which is payable to a related person (determined under rules similar to the rules of section 954(d)(3)).“(C) For purposes of subparagraph (A), a significant modification of the terms of any obligation (including any extension of the term of such obligation) shall be treated as a new issue.”
Pub. L. 108–357, title IV, § 410(b),
Pub. L. 107–16, title VI, § 621(b),
Amendment by Pub. L. 105–34 applicable to remuneration for services performed in taxable years beginning after
Amendment by Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.
Amendment by section 11813(b)(17) of Pub. L. 101–508 applicable to property placed in service after
Amendment by section 7811(i)(2) of Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title.
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Amendment by Pub. L. 100–203 applicable to dividends received or accrued after
Amendment by section 104(b)(11) of Pub. L. 99–514 applicable to taxable years beginning after
Amendment by section 1211(b)(1)(B) of Pub. L. 99–514 applicable to taxable years beginning after
Amendment by section 1212(d) of Pub. L. 99–514 applicable to taxable years beginning after
Pub. L. 99–514, title XII, § 1214(d), “(1) The amendments made by this section [amending this section and sections 871, 881, 1441, and 6049 of this title] shall apply to payments made in a taxable year of the payor beginning after “(2) “(A) The amendments made by this section shall not apply to any interest paid or accrued on any obligation outstanding on “(B) If the payee of any interest to which subparagraph (A) applies is related (within the meaning of section 904(d)(2)(H) of the Internal Revenue Code of 1986) to the payor, such interest shall be treated for purposes of section 904 of such Code as if the payor were a controlled foreign corporation (within the meaning of section 957(a) of such Code).“(3) “(A) In applying the amendments made by this section to any payment made by a corporation in a taxable year of such corporation beginning before “(B) In applying the amendments made by this section to any payment made by a corporation in a taxable year of such corporation beginning after “(4) “(A) The amendments made by this section shall not apply to any dividend paid before “(B) For purposes of subparagraph (A), the term ‘qualified corporation’ means any business systems corporation which—“(i) was incorporated in Delaware in February, 1979,“(ii) is headquartered in Garden City, New York, and“(iii) the parent corporation of which is a resident of Sweden.”
[Pub. L. 100–647, title I, § 1012(g)(1)(B),
Amendment by section 1241(b) of Pub. L. 99–514 applicable to taxable years beginning after
Amendment by Pub. L. 98–21 applicable to benefits received after
Pub. L. 96–605, title I, § 104(b),
Amendment by Pub. L. 96–499 applicable to dispositions after
Pub. L. 95–600, title III, § 370(b), “(1) The amendment made by subsection (a) [amending this section] shall apply to all railroad rolling stock placed in service with respect to the taxpayer after the date of the enactment of this Act [“(2) “(A) At the election of the taxpayer, the amendment made by subsection (a) shall also apply, for taxable years beginning after the date of the enactment of this Act, to all railroad rolling stock placed in service with respect to the taxpayer on or before such date of enactment. Such an election may not be revoked except with the consent of the Secretary of the Treasury or his delegate.“(B) An election under subparagraph (A), and any revocation of such an election, shall be made in such manner and at such time as the Secretary of the Treasury or his delegate may by regulations prescribe.”
Pub. L. 95–600, title V, § 540(b),
Amendment by Pub. L. 95–30 applicable to taxable years beginning after
Pub. L. 94–455, title I, § 1036(c),
For effective date of amendment by section 1051(h)(3) of Pub. L. 94–455, see section 1051(i)(1) of Pub. L. 94–455, set out as a note under section 27 of this title.
Amendment by section 1901(b)(26)(A), (B), (c)(7) of Pub. L. 94–455 effective for taxable years beginning after
Amendment by section 1904(b)(10)(B) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after date of enactment of this Act [
Pub. L. 93–625, § 9(c),
Pub. L. 92–9, § 3(a)(3),
Pub. L. 92–178, title III, § 314(c),
Amendment by section 503 of Pub. L. 92–178 applicable with respect to taxable years ending after
Pub. L. 91–172, title IV, § 435(a)(1),
Pub. L. 89–809, title I, § 102(e), “(1) The amendments made by subsections (a), (c), and (d) [amending this section and sections 864 and 895 of this title] shall apply with respect to taxable years beginning after “(2) The amendments made by subsection (b) [amending this section] shall apply with respect to amounts received after
Amendment by Pub. L. 87–834 applicable in respect of any distribution received by a domestic corporation after
Amendment by Pub. L. 86–779 applicable to dividends received after
Pub. L. 92–9, § 1(a),
Pub. L. 89–809, title I, § 101,
For provisions that nothing in amendment by Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to
For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to
Subsec. (a)(2)(B) of this section to be applied by substituting “100/80ths” for the fraction specified therein with regard to dividends received or accrued during 1987, see section 1006(b)(1)(B) of Pub. L. 100–647 set out as a note under section 245 of this title.
Pub. L. 100–647, title I, § 1012(aa)(2)–(4), “(2) The following amendments made by the Reform Act [Pub. L. 99–514] shall apply notwithstanding any treaty obligation of the United States in effect on the date of the enactment of the Reform Act [“(A) The amendments made by section 1201 of the Reform Act [amending sections 864, 904, and 954 of this title].“(B) The amendments made by title VII of the Reform Act [enacting sections 53 and 55 to 59 of this title and amending sections 5, 12, 26, 28, 29, 38, 48, 173, 174, 263, 381, 443, 703, 882, 897, 904, 936, 1016, 1363, 1366, 1561, 6154, 6425, and 6655 of this title] to the extent such amendments relate to the alternative minimum tax foreign tax credit.“(3) The following amendments made by the Reform Act [Pub. L. 99–514] shall not apply to the extent the application of such amendments would be contrary to any treaty obligation of the United States in effect on the date of the enactment of the Reform Act [“(A) The amendments made by section 1211 of the Reform Act [enacting section 865 of this title and amending this section and sections 862 to 864, 871, 881, and 904 of this title] to the extent—“(i) such amendments apply in the case of an individual treated as a resident of a foreign country under a treaty obligation of the United States as so in effect, or“(ii) such amendments relate to income of a nonresident from the sale or exchange of inventory property which would otherwise be sourced under section 865(e)(2) of the 1986 Code.“(B) The amendments made by section 1212(a) of the Reform Act [amending section 863 of this title]; except for purposes of determining the amount of the foreign tax credit.“(C) The amendments made by subsections (b) and (c) of section 1212 of the Reform Act [enacting section 887 of this title and amending sections 872 and 883 of this title].“(D) The amendments made by section 1214 of the Reform Act [amending this section and sections 871, 881, 1441, and 6049 of this title]; except for purposes of determining the amount of the foreign tax credit.“(E) The amendment made by section 1241(a) of the Reform Act [enacting section 884 of this title and renumbering former section 884 as 885] to the extent that, under a treaty obligation of the United States, interest described in section 884(f)(1)(A) of the 1986 Code (as added by such amendment) which is in excess of amounts deducted would be treated as other than United States source.“(F) The amendment made by section 1241(b)(2)(A) of the Reform Act [amending this section].“(G) The amendment made by section 1241(a) of the Reform Act [enacting section 884 of this title and renumbering former section 884 as 885] to the extent such amendment relates to section 884(f)(1)(B) of the 1986 Code.“(H) The amendments made by section 1242 of the Reform Act [amending section 864 of this title] to the extent they relate to paragraph (7) of section 864(c) of the 1986 Code.“(I) The amendment made by section 1247(a) of the Reform Act [amending section 892 of this title].“(J) The amendments made by section 123 of the Reform Act [amending sections 74, 117, 1441, and 7871 of this title].“(4) For purposes of paragraphs (2) and (3), any amendment made by this title [see Tables for classification] shall be treated as if it had been included in the provision of the Reform Act [Pub. L. 99–514] to which such amendment relates.”
Pub. L. 100–647, title IV, § 4009, “(a) For purposes of sections 861(b), 862(b), and 863(b) of the 1986 Code, qualified research and experimental expenditures shall be allocated and apportioned as follows:“(1) Any qualified research and experimental expenditures expended solely to meet legal requirements imposed by a political entity with respect to the improvement or marketing of specific products or processes for purposes not reasonably expected to generate gross income (beyond de minimis amounts) outside the jurisdiction of the political entity shall be allocated only to gross income from sources within such jurisdiction.“(2) In the case of any qualified research and experimental expenditures (not allocated under paragraph (1)) to the extent—“(A) that such expenditures are attributable to activities conducted in the United States, 64 percent of such expenditures shall be allocated and apportioned to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States, and“(B) that such expenditures are attributable to activities conducted outside the United States, 64 percent of such expenditures shall be allocated and apportioned to income from sources outside the United States and deducted from such income in determining the amount of taxable income from sources outside the United States.“(3) The remaining portion of qualified research and experimental expenditures (not allocated under paragraphs (1) and (2)) shall be apportioned, at the annual election of the taxpayer, on the basis of gross sales or gross income, except that, if the taxpayer elects to apportion on the basis of gross income, the amount apportioned to income from sources outside the United States shall be at least 30 percent of the amount which would be so apportioned on the basis of gross sales.“(b) For purposes of this section, the term ‘qualified research and experimental expenditures’ means amounts which are research and experimental expenditures within the meaning of section 174 of the 1986 Code. For purposes of this subsection, rules similar to the rules of [former] subsection (c) of section 174 of the 1986 Code shall apply.“(c) “(1) Any qualified research and experimental expenditures described in paragraph (2)—“(A) if incurred by a United States person, shall be allocated and apportioned under this section in the same manner as if they were attributable to activities conducted in the United States, and“(B) if incurred by a person other than a United States person, shall be allocated and apportioned under this section in the same manner as if they were attributable to activities conducted outside the United States.“(2) For purposes of paragraph (1), qualified research and experimental expenditures are described in this paragraph if such expenditures are attributable to activities conducted—“(A) in space,“(B) 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, or“(C) in Antarctica.“(d) “(1) Except as provided in paragraph (2), the allocation and apportionment required by subsection (a) shall be determined as if all members of the affiliated group (as defined in subsection (e)(5) of section 864 of the 1986 Code) were a single corporation.“(2) For purposes of the allocation and apportionment required by subsection (a)—“(A) sales and gross income from products produced in whole or in part in a possession by an electing corporation (within the meaning of [former] section 936(h)(5)(E) of the 1986 Code); and“(B) dividends from an electing corporation,shall not be taken into account, except that this paragraph shall not apply to sales of (and gross income and dividends attributable to sales of) products with respect to which an election under [former] section 936(h)(5)(F) of the 1986 Code is not in effect.“(3) The qualified research and experimental expenditures taken into account for purposes of subsection (a) shall be adjusted to reflect the amount of such expenditures included in computing the cost-sharing amount (determined under [former] section 936(h)(5)(C)(i)(I) of the 1986 Code).“(4) The Secretary of the Treasury or his delegate may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations providing for the source of gross income and the allocation and apportionment of deductions to take into account the adjustments required by paragraph (3).“(5) Paragraph (6) of section 864(e) of the 1986 Code shall not apply to qualified research and experimental expenditures.“(e) “(1) Except as provided in this subsection, this section shall apply to the taxpayer’s 1st taxable year beginning after “(2) Notwithstanding paragraph (1), this section shall only apply to that portion of the qualified research and experimental expenditures for the taxable year referred to in paragraph (1) which bears the same ratio to the total amount of such expenditures as—“(A) the lesser of 4 months or the number of months in the taxable year, bears to“(B) the number of months in the taxable year.”
Pub. L. 99–514, title XII, § 1216, “(a) For purposes of section 861(b), section 862(b), and section 863(b) of the Internal Revenue Code of 1954 [now 1986], notwithstanding section 864(e) of such Code—“(1) 50 percent of all amounts allowable as a deduction for qualified research and experimental expenditures shall be apportioned to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States, and“(2) the remaining portion of such amounts shall be apportioned on the basis of gross sales or gross income.The preceding sentence shall not apply to any expenditures described in section 1.861–8(e)(3)(i)(B) of the Income Tax Regulations.“(b) For purposes of this section—“(1) The term ‘qualified research and experimental expenditures’ means amounts—“(A) which are research and experimental expenditures within the meaning of section 174 of such Code, and“(B) which are attributable to activities conducted in the United States.“(2) Rules similar to the rules of [former] section 174(c) of such Code shall apply.“(c) This section shall apply to taxable years beginning after
Pub. L. 98–369, div. A, title I, § 126, “(a) For purposes of section 861(b), section 862(b), and section 863(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], all amounts allowable as a deduction for qualified research and experimental expenditures shall be allocated to income from sources within the United States and deducted from such income in determining the amount of taxable income from sources within the United States.“(b) For purposes of this section—“(1) The term ‘qualified research and experimental expenditures’ means amounts—“(A) which are research and experimental expenditures within the meaning of section 174 of such Code, and“(B) which are attributable to activities conducted in the United States.“(2) Rules similar to the rules of [former] subsection (c) of section 174 of such Code shall apply.“(c) “(1) This section shall apply to taxable years beginning after “(2) If the taxpayer’s 4th taxable year beginning after
Pub. L. 89–809, title I, § 110,