Collapse to view only § 937. Residence and source rules involving possessions
- § 931. Income from sources within Guam, American Samoa, or the Northern Mariana Islands
- § 932. Coordination of United States and Virgin Islands income taxes
- § 933. Income from sources within Puerto Rico
- § 934. Limitation on reduction in income tax liability incurred to the Virgin Islands
- [§ 934A. Repealed.
- [§ 935. Repealed.
- [§ 936. Repealed.
- § 937. Residence and source rules involving possessions
§ 931. Income from sources within Guam, American Samoa, or the Northern Mariana Islands
(a) General rule
In the case of an individual who is a bona fide resident of a specified possession during the entire taxable year, gross income shall not include—
(1) income derived from sources within any specified possession, and
(2) income effectively connected with the conduct of a trade or business by such individual within any specified possession.
(b) Deductions, etc. allocable to excluded amounts not allowable
An individual shall not be allowed—
(1) as a deduction from gross income any deductions (other than the deduction under section 151, relating to personal exemptions), or
(2) any credit,
properly allocable or chargeable against amounts excluded from gross income under this section.
(c) Specified possession
(d) Employees of the United States
(Aug. 16, 1954, ch. 736, 68A Stat. 291; Pub. L. 89–809, title I, § 107(a), Nov. 13, 1966, 80 Stat. 1571; Pub. L. 92–178, title V, § 502(d), Dec. 10, 1971, 85 Stat. 550; Pub. L. 92–606, § 1(f)(1), Oct. 31, 1972, 86 Stat. 1497; Pub. L. 94–455, title X, § 1051(c), title XIX, §§ 1901(a)(117), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1645, 1784, 1834; Pub. L. 95–30, title I, § 101(d)(12), May 23, 1977, 91 Stat. 134; Pub. L. 98–369, div. A, title VII, § 711(c)(2)(A)(iv), July 18, 1984, 98 Stat. 945; Pub. L. 99–514, title XII, § 1272(a), Oct. 22, 1986, 100 Stat. 2593; Pub. L. 108–357, title VIII, § 908(c)(1), Oct. 22, 2004, 118 Stat. 1656.)
§ 932. Coordination of United States and Virgin Islands income taxes
(a) Treatment of United States residents
(1) Application of subsectionThis subsection shall apply to an individual for the taxable year if—
(A) such individual—
(i) is a citizen or resident of the United States (other than a bona fide resident of the Virgin Islands during the entire taxable year), and
(ii) has income derived from sources within the Virgin Islands, or effectively connected with the conduct of a trade or business within such possession, for the taxable year, or
(B) such individual files a joint return for the taxable year with an individual described in subparagraph (A).
(2) Filing requirement
(3) Extent of income tax liability
(b) Portion of United States tax liability payable to the Virgin Islands
(1) In general
(2) Applicable percentage
(A) In general
(B) Virgin Islands adjusted gross income
(3) Amounts paid allowed as credit
(c) Treatment of Virgin Islands residents
(1) Application of subsectionThis subsection shall apply to an individual for the taxable year if—
(A) such individual is a bona fide resident of the Virgin Islands during the entire taxable year, or
(B) such individual files a joint return for the taxable year with an individual described in subparagraph (A).
(2) Filing requirement
(3) Extent of income tax liability
(4) Residents of the Virgin IslandsIn the case of an individual—
(A) who is a bona fide resident of the Virgin Islands during the entire taxable year,
(B) who, on his return of income tax to the Virgin Islands, reports income from all sources and identifies the source of each item shown on such return, and
(C) who fully pays his tax liability referred to in section 934(a) to the Virgin Islands with respect to such income,
for purposes of calculating income tax liability to the United States, gross income shall not include any amount included in gross income on such return, and allocable deductions and credits shall not be taken into account.
(d) Special rule for joint returns
(e) Special rule for applying section to tax imposed in Virgin Islands
(Added Pub. L. 99–514, title XII, § 1274(a), Oct. 22, 1986, 100 Stat. 2596; amended Pub. L. 100–647, title I, § 1012(w)(1)–(3), Nov. 10, 1988, 102 Stat. 3530; Pub. L. 108–357, title VIII, § 908(c)(2), Oct. 22, 2004, 118 Stat. 1656.)
§ 933. Income from sources within Puerto Rico
The following items shall not be included in gross income and shall be exempt from taxation under this subtitle:
(1) Resident of Puerto Rico for entire taxable year
(2) Taxable year of change of residence from Puerto Rico
(Aug. 16, 1954, ch. 736, 68A Stat. 293; Pub. L. 99–514, title XII, § 1272(d)(3), Oct. 22, 1986, 100 Stat. 2594.)
§ 934. Limitation on reduction in income tax liability incurred to the Virgin Islands
(a) General rule
(b) Reductions permitted with respect to certain income
(1) In general
(2) Exception for liability paid by citizens or residents of the United States
(3) Special rule for non-United States income of certain foreign corporations
(A) In general
(B) Qualified foreign corporation
For purposes of subparagraph (A), the term “qualified foreign corporation” means any foreign corporation if less than 10 percent of—
(i) the total voting power of the stock of such corporation, and
(ii) the total value of the stock of such corporation, is owned or treated as owned (within the meaning of section 958) by 1 or more United States persons.
(4) Determination of income source, etc.
(Added Pub. L. 86–779, § 4(a)(1), Sept. 14, 1960, 74 Stat. 998; amended Pub. L. 94–455, title XIX, §§ 1901(a)(118), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1784, 1834; Pub. L. 97–248, title II, § 213(b), Sept. 3, 1982, 96 Stat. 463; Pub. L. 97–455, § 1(c), Jan. 12, 1983, 96 Stat. 2498; Pub. L. 98–369, div. A, title VIII, § 801(d)(7), July 18, 1984, 98 Stat. 996; Pub. L. 99–514, title XII, § 1275(a)(2)(A), (c)(1), (2), title XVIII, § 1876(f)(2), Oct. 22, 1986, 100 Stat. 2598, 2900; Pub. L. 108–357, title VIII, § 908(c)(3), Oct. 22, 2004, 118 Stat. 1656.)
[§ 934A. Repealed. Pub. L. 99–514, title XII, § 1275(c)(3), Oct. 22, 1986, 100 Stat. 2599]
[§ 935. Repealed. Pub. L. 99–514, title XII, § 1272(d)(2), Oct. 22, 1986, 100 Stat. 2594]
[§ 936. Repealed. Pub. L. 115–141, div. U, title IV, § 401(d)(1)(C), Mar. 23, 2018, 132 Stat. 1206]
§ 937. Residence and source rules involving possessions
(a) Bona fide resident
For purposes of this subpart, section 865(g)(3), section 876, section 881(b), paragraphs (2) and (3) of section 901(b), section 957(c), section 3401(a)(8)(C), and section 7654(a), except as provided in regulations, the term “bona fide resident” means a person—
(1) who is present for at least 183 days during the taxable year in Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands, as the case may be, and
(2) who does not have a tax home (determined under the principles of section 911(d)(3) without regard to the second sentence thereof) outside such specified possession during the taxable year and does not have a closer connection (determined under the principles of section 7701(b)(3)(B)(ii)) to the United States or a foreign country than to such specified possession.
For purposes of paragraph (1), the determination as to whether a person is present for any day shall be made under the principles of section 7701(b).
(b) Source rules
Except as provided in regulations, for purposes of this title—
(1) except as provided in paragraph (2), rules similar to the rules for determining whether income is income from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall apply for purposes of determining whether income is from sources within a possession specified in subsection (a)(1) or effectively connected with the conduct of a trade or business within any such possession, and
(2) any income treated as income from sources within the United States or as effectively connected with the conduct of a trade or business within the United States shall not be treated as income from sources within any such possession or as effectively connected with the conduct of a trade or business within any such possession.
(c) Reporting requirement
(1) In general
(2) Transition rule
(Added Pub. L. 108–357, title VIII, § 908(a), Oct. 22, 2004, 118 Stat. 1655.)