General rule
Exclusions
Ships operated by certain nonresidents
Gross income derived by an individual resident of a foreign country from the international operation of a ship or ships if such foreign country grants an equivalent exemption to individual residents of the United States.
Aircraft operated by certain nonresidents
Gross income derived by an individual resident of a foreign country from the international operation of aircraft if such foreign country grants an equivalent exemption to individual residents of the United States.
Compensation of participants in certain exchange or training programs
Certain bond income of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands
Income derived by a nonresident alien individual from a series E or series H United States savings bond, if such individual acquired such bond while a resident of the Ryukyu Islands or the Trust Territory of the Pacific Islands.
Income derived from wagering transactions in certain parimutuel pools
Gross income derived by a nonresident alien individual from a legal wagering transaction initiated outside the United States in a parimutuel pool with respect to a live horse race or dog race in the United States.
Certain rental income
Income to which paragraphs (1) and (2) apply shall include income which is derived from the rental on a full or bareboat basis of a ship or ships or aircraft, as the case may be.
Application to different types of transportation
The Secretary may provide that this subsection be applied separately with respect to income from different types of transportation.
Treatment of possessions
To the extent provided in regulations, a possession of the United States shall be treated as a foreign country for purposes of this subsection.
Aug. 16, 1954, ch. 73668A Stat. 280Pub. L. 87–256, § 110(c)75 Stat. 536Pub. L. 89–809, title I, § 103(b)80 Stat. 1550Pub. L. 99–514, title XII, § 1212(c)(1)100 Stat. 2538Pub. L. 100–647, title I, § 1012(e)(2)(B)102 Stat. 3500Pub. L. 101–239, title VII, § 7811(i)(8)(C)103 Stat. 2411Pub. L. 103–296, title III, § 320(a)(2)108 Stat. 1535Pub. L. 108–357, title IV, § 419(a)118 Stat. 1513(, ; , , ; , , ; , (2), , ; , (5), (s)(2)(A), , , 3527; , , ; , , ; , , .)
Editorial Notes
References in Text
section 1101 of Title 8Section 101 of the Immigration and Nationality Act, referred to in subsec. (b)(3), is classified to , Aliens and Nationality.
Amendments
Pub. L. 108–3572004—Subsec. (b)(5) to (8). added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.
Pub. L. 103–2961994—Subsec. (b)(3). substituted “(F), (J), or (Q)” for “(F) or (J)”.
Pub. L. 101–2391989—Subsec. (b)(7). added par. (7).
Pub. L. 100–647, § 1012(s)(2)(A)1988—Subsec. (a). , inserted “, except where the context clearly indicates otherwise” after “individual”.
Pub. L. 100–647, § 1012(e)(2)(B)Subsec. (b)(1), (2). , (5), substituted “to individual residents of the United States” for “to citizens of the United States and to corporations organized in the United States” and “international operation” for “operation”.
Pub. L. 99–514, § 1212(c)(1)1986—Subsec. (b)(1). , added par. (1) and struck out former par. (1), ships under foreign flag, which read as follows: “Earnings derived from the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States.”
Pub. L. 99–514, § 1212(c)(1)Subsec. (b)(2). , added par. (2) and struck out former par. (2), aircraft of foreign registry, which read as follows: “Earnings derived from the operation of aircraft registered under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States.”
Pub. L. 99–514, § 1212(c)(2)Subsec. (b)(5), (6). , added pars. (5) and (6).
Pub. L. 89–809, § 103(b)(1)1966—Subsec. (a). , limited the inclusion of gross income which is derived from sources within the United States to such income which is not effectively connected with the conduct of a trade or business within the United States and inserted provision including gross income without the limitation as to source which is effectively connected with the conduct of a trade or business within the United States.
Pub. L. 89–809, § 103(b)(2)Subsec. (b)(3)(B). , substituted “by a domestic corporation, a domestic partnership, or an individual who is a citizen or resident of the United States” for “by a domestic corporation”.
Pub. L. 89–809, § 102(b)(3)Subsec. (b)(4). , added par. (4).
Pub. L. 87–2561961—Subsec. (b)(3). added par. (3).
Statutory Notes and Related Subsidiaries
Effective Date of 2004 Amendment
Pub. L. 108–357, title IV, § 419(c)118 Stat. 1513
Effective Date of 1994 Amendment
Pub. L. 103–296section 320(c) of Pub. L. 103–296section 871 of this titleAmendment by effective with calendar quarter following , see , set out as a note under .
Effective Date of 1989 Amendment
Pub. L. 101–239Pub. L. 100–647section 7817 of Pub. L. 101–239section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, , to which such amendment relates, see , set out as a note under .
Effective Date of 1988 Amendment
Pub. L. 100–647Pub. L. 99–514section 1019(a) of Pub. L. 100–647section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .
Effective Date of 1986 Amendment
Pub. L. 99–514section 1212(f) of Pub. L. 99–514section 863 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 1966 Amendment
Pub. L. 89–809section 103(n)(1) of Pub. L. 89–809section 871 of this titleAmendment by applicable with respect to taxable years beginning after , see , set out as a note under .
Effective Date of 1961 Amendment
Pub. L. 87–256section 110(h)(1) of Pub. L. 87–256section 117 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Pub. L. 99–514Applicability of Certain Amendments by in Relation to Treaty Obligations of United States
Pub. L. 99–514Pub. L. 100–647Pub. L. 99–514Pub. L. 100–647section 861 of this titleFor nonapplication of amendment by section 1212(c)(1), (2) of to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on , with provision that for such purposes any amendment by title I of be treated as if it had been included in the provision of to which such amendment relates, see section 1012(aa)(3), (4) of , set out as a note under .
Executive Documents
Termination of Trust Territory of the Pacific Islands
section 1681 of Title 48For termination of Trust Territory of the Pacific Islands, see note set out preceding , Territories and Insular Possessions.