74 S T A T. ]
PUBLIC LAW 8 6 - 7 7 9 - S E P T. 14, 1960
999
corporation, subsection (a) shall not apply (if the information required hj subsection (d) is supplied) to the extent such corporation derived its income from sources without the United States if the conditions of both paragraph (1) and paragraph (2) are satisfied: "(1) THREE-YEAR PERIOD.—If 80 percent or more of the gross income of such corporation for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within the Virgin Islands; and "(2) TRADE OR BUSINESS.—If 50 percent or more of the gross income of such corporation for such period or such ^ a r t thereof was derived from the active conduct of a trade or business within the Virgin Islands. For purposes of the preceding sentence, the gross income of a Virgin Islands corporation, and the sources from which the income of such corporation is derived, shall be determined as if such corporation were a domestic corporation. For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States. "(c) EXCEPTION TOR CERTAIN EESIDENTS OF THE VIRGIN ISLANDS.—
Subsection (a) shall not apply in the case of an individual citizen of the United States who is a bona fide resident of the Virgin Islands during the entire taxable year (if the information required by subsection (d) is supplied), to the extent his income is derived from sources within the Virgin Islands (except that subsection (a) shall apply in the case of amounts received for services performed as an employee of the United States or any agency thereof). For purposes of the preceding sentence, gain or loss from the sale or exchange of any security (as defined in section 165(g)(2)) shall not be treated as derived from sources within the Virgin Islands. " (d) REQUIREMENT To SUPPLY INFORMATION.—Subsections (b)
26 USC 165.
and
(c) shall apply only in the case of persons who supply (at such time and in such manner as the Secretary or his delegate may by regulations prescribe) such information as the Secretary or his delegate may by regulations prescribe for purposes of determining the applicability of such subsections." (2) The table of sections for such subpart D is amended by adding at the end thereof the following: "Sec. 934. Limitation on reduction in income tax liability incurred to the Virgin Islands."
(b)(1) Subchapter C of chapter 11 of the Internal Revenue Code of 1954 (relating to miscellaneous estate tax provisions) is amended by adding at the end thereof the following new section: "SEC. 2209. CERTAIN RESIDENTS OF POSSESSIONS CONSIDERED NONRESIDENTS NOT CITIZENS OF THE UNITED STATES. "A decedent who was a citizen of the United States and a resident of a possession thereof at the time of his death shall, for purposes of the tax imposed by this chapter, be considered a 'nonresident not a citizen of the United States' within the meaning of that term wherever used in this title, but only if such person acquired his United States citizenship solely by reason of (1) his being a citizen of such possessioi^ of the United States, or (2) his birth or residence within such possession of the United States."
26 USC 2201.
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