[Code of Federal Regulations] [Title 26, Volume 10] [Revised as of April 1, 2004] From the U.S. Government Printing Office via GPO Access [CITE: 26CFR1.911-1] [Page 5-9] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED) PART 1_INCOME TAXES--Table of Contents Sec. 1.911-1 Partial exclusion for earned income from sources within a foreign country and foreign housing costs. Normal Taxes and Surtaxes Tax Based on Income From Sources Within or Without the United States Earned Income of Citizens or Residents of United States 1.911-1 Partial exclusion for earned income from sources within a foreign country and foreign housing costs. 1.911-2 Qualified individuals. 1.911-3 Determination of amount of foreign earned income to be excluded. 1.911-4 Determination of housing cost amount eligible for exclusion or deduction. 1.911-5 Special rules for married couples. 1.911-6 Disallowance of deductions, exclusions, and credits. 1.911-7 Procedural rules. 1.911-8 Former deduction for certain expenses of living abroad. earned income of citizens of united states 1.912-1 Exclusion of certain cost-of-living allowances. 1.912-2 Exclusion of certain allowances of Foreign Service personnel. 1.921-1T Temporary regulations providing transition rules for DISCs and FSCs. 1.921-2 Foreign Sales Corporation--general rules. 1.921-3T Temporary regulations; Foreign Sales Corporation general rules. 1.922-1 Requirements that a corporation must satisfy to be a FSC or a small FSC. 1.923-1T Temporary regulations; exempt foreign trade income. 1.924(a)-1T Temporary regulations; definition of foreign trading gross receipts. 1.924(c)-1 Requirement that a FSC be managed outside the United States. 1.924(d)-1 Requirement that economic processes take place outside the United States. 1.924(e)-1 Activities relating to the disposition of export property. 1.925(a)-1T Temporary regulations; transfer pricing rules for FSCs. 1.925(b)-1T Temporary regulations; marginal costing rules. 1.926(a)-1 Distributions to shareholders. 1.926(a)-1T Temporary regulations; distributions to shareholders. 1.927(a)-1T Temporary regulations; definition of export property. 1.927(b)-1T Temporary regulations; definition of gross receipts. 1.927(d)-1 Other definitions. 1.927(d)-2T Temporary regulations; definitions and special rules relating to Foreign Sales Corporation. 1.927(e)-1 Special sourcing rule. 1.927(e)-2T Temporary regulations; effect of boycott participation on FSC and small FSC benefits. 1.927(f)-1 Election and termination of status as a Foreign Sales Corporation. possessions of the united states 1.931-1 Citizens of the United States and domestic corporations deriving income from sources within a certain possession of the United States. 1.932-1 Status of citizens of U.S. possessions. 1.933-1 Exclusion of certain income from sources within Puerto Rico. 1.934-1 Limitation on reduction in income tax liability incurred to the Virgin Islands. 1.935-1 Coordination of U.S. and Guam individual income taxes. 1.936-1 Elections. 1.936-4 Intangible property income in the absence of an election out. 1.936-5 Intangible property income when an election out is made: Product, business presence, and contract manufacturing. 1.936-6 Intangible property income when an election out is made: cost sharing and profit split options; covered intangibles. 1.936-7 Manner of making election under section 936 (h)(5); special election for export sales; revocation of election under section 936(a). 1.936-7T Manner of making election under section 936(h)(5); special election for export sales; revocation of election under section 936(a) (temporary). 1.936-8T Qualified possession source investment income (temporary). [Reserved] 1.936-9T Source of qualified possession source investment income (temporary). [Reserved] 1.936-10 Qualified investments. 1.936-11 New lines of business prohibited. china trade act corporations 1.941-1 Special deduction for China Trade Act corporations. 1.941-2 Meaning of terms used in connection with China Trade Act corporations. 1.941-3 Illustration of principles. 1.943-1 Withholding by a China Trade Act corporation. controlled foreign corporations 1.951-1 Amounts included in gross income of United States shareholders. [[Page 6]] 1.951-2 Coordination of subpart F with election of a foreign investment company to distribute income. 1.951-3 Coordination of subpart F with foreign personal holding company provisions. 1.952-1 Subpart F income defined. 1.952-2 Determination of gross income and taxable income of a foreign corporation. 1.953-1 Income from insurance of United States risks. 1.953-2 Actual United States risks. 1.953-3 Risks deemed to be United States risks. 1.953-4 Taxable income to which section 953 applies. 1.953-5 Corporations not qualifying as insurance companies. 1.953-6 Relationship of sections 953 and 954. 1.954-0 Introduction. 1.954-1 Foreign base company income. 1.954-2 Foreign personal holding company income. 1.954-3 Foreign base company sales income. 1.954-4 Foreign base company services income. 1.954-5 Increase in qualified investments in less developed countries; taxable years of controlled foreign corporations beginning before January 1, 1976. 1.954-6 Foreign base company shipping income. 1.954-7 Increase in qualified investments in foreign base company shipping operations. 1.954-8 Foreign base company oil related income. 1.955-0 Effective dates. 1.955-1 Shareholder's pro rata share of amount of previously excluded subpart F income withdrawn from investment in less developed countries. 1.955-2 Amount of a controlled foreign corporation's qualified investments in less developed countries. 1.955-3 Election as to date of determining qualified investments in less developed countries. 1.955-4 Definition of less developed country. 1.955-5 Definition of less developed country corporation. 1.955-6 Gross income from sources within less developed countries. 1.955A-1 Shareholder's pro rata share of amount of previously excluded subpart F income withdrawn from investment in foreign base company shipping operations. 1.955A-2 Amount of a controlled foreign corporation's qualified investments in foreign base company shipping operations. 1.955A-3 Election as to qualified investments by related persons. 1.955A-4 Election as to date of determining qualified investment in foreign base company shipping operations. 1.956-1 Shareholder's pro rata share of a controlled foreign corporation's increase in earnings invested in United States property. 1.956-1T Shareholder's pro rata share of a controlled foreign corporation's increase in earnings invested in United States property (temporary). 1.956-2 Definition of United States property. 1.956-2T Definition of United States property (temporary). 1.956-3T Certain trade or service receivables acquired from United States persons (temporary). 1.957-1 Definition of controlled foreign corporation. 1.957-2 Controlled foreign corporation deriving income from insurance of United States risks. 1.957-3 Corporations organized in United States possessions. 1.957-4 United States person defined. 1.958-1 Direct and indirect ownership of stock. 1.958-2 Constructive ownership of stock. 1.959-1 Exclusion from gross income of United States persons of previously taxed earning and profits. 1.959-2 Exclusion from gross income of controlled foreign corporations of previously taxed earnings and profits. 1.959-3 Allocation of distributions to earnings and profits of foreign corporations. 1.959-4 Distributions to United States persons not counting as dividends. 1.960-1 Foreign tax credit with respect to taxes paid on earnings and profits of controlled foreign corporations. 1.960-2 Interrelation of section 902 and section 960 when dividends are paid by third-, second-, or first-tier corporation. 1.960-3 Gross-up of amounts included in income under section 951. 1.960-4 Additional foreign tax credit in year of receipt of previously taxed earnings and profits. 1.960-5 Credit for taxable year of inclusion binding for taxable year of exclusion. 1.960-6 Overpayments resulting from increase in limitation for taxable year of exclusion. 1.960-7 Effective dates. 1.961-1 Increase in basis of stock in controlled foreign corporations and of other property. 1.961-2 Reduction in basis of stock in foreign corporations and of other property. 1.962-1 Limitation of tax for individuals on amounts included in gross income under section 951(a). 1.962-2 Election of limitation of tax for individuals. 1.962-3 Treatment of actual distributions. 1.962-4 Transitional rules for certain taxable years. 1.963-0 Repeal of section 963; effective dates. [[Page 7]] 1.963-1 Exclusion of subpart F income upon receipt of minimum distribution. 1.963-2 Determination of the amount of the minimum distribution. 1.963-3 Distributions counting toward a minimum distribution. 1.963-4 Limitations on minimum distribution from a chain or group. 1.963-5 Foreign corporations with variation in foreign tax rate because of distributions. 1.963-6 Deficiency distribution. 1.963-7 Transitional rules for certain taxable years. 1.963-8 Determination of minimum distribution during the surcharge period. 1.964-1 Determination of the earnings and profits of a foreign corporation. 1.964-1T Special rules for computing earnings and profits of controlled foreign corporations in taxable years beginning after December 31, 1986 (temporary). 1.964-2 Treatment of blocked earnings and profits. 1.964-3 Records to be provided by United States shareholders. 1.964-4 Verification of certain classes of income. 1.964-5 Effective date of subpart F. Export Trade Corporations 1.970-1 Export trade corporations. 1.970-2 Elections as to date of determining investments in export trade assets. 1.970-3 Effective date of subpart G. 1.971-1 Definitions with respect to export trade corporations. 1.972-1 Consolidation of group of export trade corporations. 1.981-0 Repeal of section 981; effective dates. 1.981-1 Foreign law community income for taxable years beginning after December 31, 1966, and before January 1, 1977. 1.981-2 Foreign law community income for taxable years beginning before January 1, 1967. 1.981-3 Definitions and other special rules. 1.985-0 Outline of regulation. 1.985-1 Functional currency. 1.985-2 Election to use the United States dollar as the functional currency of a QBU. 1.985-3 United States dollar approximate separate transactions method. 1.985-4 Method of accounting. 1.985-5 Adjustments required upon change in functional currency. 1.985-6 Transition rules for a QBU that uses the dollar approximate separate transactions method for its first taxable year beginning in 1987. 1.985-7 Adjustments required in connection with a change to DASTM. 1.985-8 Special rules applicable to the European Monetary Union (conversion to the euro). 1.987-1 Profit and loss method of accounting for a qualified business unit of a taxpayer having a different functional currency from the taxpayer. [Reserved] 1.987-2 Accounting for gain or loss on certain transfers of property. [Reserved] 1.987-3 Termination. [Reserved] 1.987-4 Special rules relating to QBU branches of foreign taxpayers. [Reserved] 1.987-5 Transition rules for certain qualified business units using a profit and loss method of accounting for taxable years beginning before January 1, 1987. 1.988-0 Taxation of gain or loss from a section 988 transaction; table of contents. 1.988-1 Certain definitions and special rules. 1.988-2 Recognition and computation of exchange gain or loss. 1.988-3 Character of exchange gain or loss. 1.988-4 Source of gain or loss realized on a section 988 transaction. 1.988-5 Section 988(d) hedging transactions. 1.989(a)-1 Definition of a qualified business unit. 1.989(b)-1 Definition of weighted average exchange rate. 1.989(c)-1 Transition rules for certain branches of United States persons using a net worth method of accounting for taxable years beginning before January 1, 1987. Domestic International Sales Corporations 1.991-1 Taxation of a domestic international sales corporation. 1.992-1 Requirements of a DISC. 1.992-2 Election to be treated as a DISC. 1.992-3 Deficiency distributions to meet qualification requirements. 1.992-4 Coordination with personal holding company provisions in case of certain produced film rents. 1.993-1 Definition of qualified export receipts. 1.993-2 Definition of qualified export assets. 1.993-3 Definition of export property. 1.993-4 Definition of producer's loans. 1.993-5 Definition of related foreign export corporation. 1.993-6 Definition of gross receipts. 1.993-7 Definition of United States. 1.994-1 Inter-company pricing rules for DISC's. 1.994-2 Marginal costing rules. 1.995-1 Taxation of DISC income to shareholders. 1.995-2 Deemed distributions in qualified years. 1.995-3 Distributions upon disqualification. 1.995-4 Gain on disposition of stock in a DISC. 1.995-5 Foreign investment attributable to producer's loans. 1.995-6 Taxable income attributable to military property. [[Page 8]] 1.996-1 Rules for actual distributions and certain deemed distributions. 1.996-2 Ordering rules for losses. 1.996-3 Divisions of earnings and profits. 1.996-4 Subsequent effect of previous disposition of DISC stock. 1.996-5 Adjustment to basis. 1.996-6 Effectively connected income. 1.996-7 Carryover of DISC tax attributes. 1.996-8 Effect of carryback of capital loss or net operating loss to prior DISC taxable year. 1.997-1 Special rules for subchapter C of the Code. Authority: 26 U.S.C. 7805. Section 1.911-7 also issued under 26 U.S.C. 911(d)(9). Sections 1.924(c)-1, 1.924(d)-1, and 1.924(e)-1 also issued under 26 U.S.C. 924(d). Section 1.925(a)-1 also issued under 26 U.S.C. 925(b)(1) and (2) and 927(d)(2)(B). Section 1.925(a)-1T is also issued under 26 U.S.C. 925(b)(1) and (2) and 927(d)(2)(B). Section 1.925(b)-1T is also issued under 26 U.S.C. 925(b)(1) and (2) and 927(d)(2)(B). Section 1.927(d)-1 also issued under 26 U.S.C. 927(d)(1)(B). Section 1.927(e)-1 also issued under 26 U.S.C. 927(e)(1). Section 1.927(e)-2T also issued under 26 U.S.C. 927(e)(2). Section 1.927(f)-1 also issued under 26 U.S.C. 927(f). Section 1.936-4 also issued under 26 U.S.C. 936(h). Section 1.936-5 also issued under 26 U.S.C. 936(h). Section 1.936-6 also issued under 26 U.S.C. 863(a) and (b), and 26 U.S.C. 936(h). Section 1.936-7 also issued under 26 U.S.C. 936(h). Sections 1.936-11 also issued under 26 U.S.C. 936(j). Section 1.952-11T is also issued under 26 U.S.C. 852(b)(3)(C), 852(b)(8), and 852(c). Section 1.953-2 also issued under 26 U.S.C. 7701(b)(11). Section 1.954-0 also issued under 26 U.S.C. 954 (b) and (c). Section 1.954-1 also issued under 26 U.S.C. 954 (b) and (c). Section 1.954-2 also issued under 26 U.S.C. 954 (b) and (c). Section 1.956-3T also issued under 26 U.S.C. 864(d)(8). Section 1.957-1 also issued under 26 U.S.C. 957. Section 1.960-1 also issued under 26 U.S.C. 960(a). Sectns 1.985-0 through 1.985-5 also issued under 26 U.S.C. 985. Sections 1.987-1 through 1.987-5 also issued under 26 U.S.C. 987. Sections 1.988-0 through 1.988-5 also issued under 26 U.S.C. 988. Sections 1.989(a)-0T and 1.989(a)-1T also issued under 26 U.S.C. 989(c). Section 1.989(b)-1 also issued under 26 U.S.C. 989(b). Section 1.989-1(c) also issued under 26 U.S.C. 989(c). Source: T.D. 6500, 25 FR 11910, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, unless otherwise noted. Earned Income of Citizens or Residents of United States (a) In general. Section 911 provides that a qualified individual may elect to exclude the individual's foreign earned income and the housing cost amount from the individual's gross income for the taxable year. Foreign earned income is excludable to the extent of the applicable limitation for the taxable year. The housing cost amount for the taxable year is excludable to the extent attributable to employer provided amounts. If a portion of the housing cost amount for the taxable year is attributable to non-employer provided amounts, such amount may be deductible by the qualified individual subject to a limitation. The amounts excluded under section 911(a) and the amount deducted under section 911(c)(3)(A) for the taxable year shall not exceed the individual's foreign earned income for such taxable year. Foreign earned income must be earned during a period for which the individual qualifies to make an election under section 911(d)(1). A housing cost amount that would be deductible except for the application of this limitation may be carried over to the next taxable year and is deductible to the extent of the limitation for that year. Except as otherwise provided, Sec. Sec. 1.911-1 through 1.911-7 apply to taxable years beginning after December 31, 1981. These sections do not apply to any item of income, expense, deduction, or credit arising before January 1, 1982, even if such item is attributable to services performed after December 31, 1981. (b) Scope. Section 1.911-2 provides rules for determining whether an individual qualifies to make an election under section 911. Section 1.911-3 provides rules for determining the amount [[Page 9]] of foreign earned income that is excludable under section 911(a)(1). Section 1.911-4 provides rules for determining the housing cost amount and the portions excludable under section 911(a)(2) or deductible under section 911(c)(3). Section 1.911-5 provides special rules applicable to married couples. Section 1.911-6 provides for the disallowance of deductions, exclusions, and credits attributable to amounts excluded under section 911. Section 1.911-7 provides procedural rules for making or revoking an election under section 911. Section 1.911-8 provides a reference to rules applicable to taxable years beginning before January 1, 1982. (Sec. 911 (95 Stat. 194; 26 U.S.C. 911) and sec. 7805 (68A Stat. 917; 26 U.S.C. 7805) of the Internal Revenue Code of 1954) [T.D. 8006, 50 FR 2964, Jan. 23, 1985]