Cases: Stanford v. Commissioner, 297 F.2d 298 (9th Cir. 1961); Brittingham v. Commissioner, 66 T.C. 373 (1976)
(a) General rule In the case of a nonresident alien individual, except where the context clearly indicates otherwise, gross income includes only—
Amended 1966, 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1012(s)(2)(A), inserted “, except where the context clearly indicates otherwise” after “individual”.
- 1966 Pub. L. 89-809 Pub. L. 89–809, § 103(b)(1), 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.
Cases: Dillin v. Commissioner, 56 T.C. 228 (1971)
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(1) gross income which is derived from sources within the United States and which is not effectively connected with the conduct of a trade or business within the United States, and
(2) gross income which is effectively connected with the conduct of a trade or business within the United States.
(b) Exclusions The following items shall not be included in gross income of a nonresident alien individual, and shall be exempt from taxation under this subtitle:
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(1) 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.
Amended 1986, 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1012(e)(2)(B), (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”.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1212(c)(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.”
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(2) 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.
Amended 1986, 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1012(e)(2)(B), (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”.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1212(c)(1), 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.”
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(3) Compensation of participants in certain exchange or training programs Compensation paid by a foreign employer to a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F), (J), or (Q) of section 101(a)(15) of the Immigration and Nationality Act, as amended. For purposes of this paragraph, the term “foreign employer” means—
Amended 1961, 1994
- 1994 Pub. L. 103-296 Pub. L. 103–296 substituted “(F), (J), or (Q)” for “(F) or (J)”.
- 1961 Pub. L. 87-256 Pub. L. 87–256 added par. (3).
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(A) a nonresident alien individual, foreign partnership, or foreign corporation, or
(B) an office or place of business maintained in a foreign country or in a possession of the United States by a domestic corporation, a domestic partnership, or an individual who is a citizen or resident of the United States.
Amended 1966
- 1966 Pub. L. 89-809 Pub. L. 89–809, § 103(b)(2), 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”.
(4) 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.
Amended 1966
- 1966 Pub. L. 89-809 Pub. L. 89–809, § 102(b)(3), added par. (4).
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(5) 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.
Amended 1986, 2004
- 2004 Pub. L. 108-357 Pub. L. 108–357 added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1212(c)(2), added pars. (5) and (6).
(6) 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.
Amended 1986, 2004
- 2004 Pub. L. 108-357 Pub. L. 108–357 added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1212(c)(2), added pars. (5) and (6).
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(7) 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.
Amended 1989, 2004
- 2004 Pub. L. 108-357 Pub. L. 108–357 added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.
- 1989 Pub. L. 101-239 Pub. L. 101–239 added par. (7).
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(8) 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.
Amended 2004
- 2004 Pub. L. 108-357 Pub. L. 108–357 added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.