[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: 26CFR1.933-1]

[Page 130-131]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.933-1  Exclusion of certain income from sources within Puerto Rico.

    (a) General rule. An individual (whether a United States citizen or 
an alien), who is a bona fide resident of Puerto Rico during the entire 
taxable year, shall exclude from his gross income the income derived 
from sources within Puerto Rico, except amounts received for services 
performed as an employee of the United States or any agency thereof. 
Whether the individual is a bona fide resident of Puerto Rico shall be 
determined in general by applying to the facts and circumstances in each 
case the principles of Sec. Sec. 1.871-2, 1.871-3, 1.871-4, and 1.871-
5, relating to what constitutes residence or nonresidence, as the case 
may be in the United States in the case of an alien individual. Once 
bona fide residence in Puerto Rico has been established, temporary 
absence therefrom in the United States or elsewhere on vacation or 
business trips will not necessarily deprive an individual of his status 
as a bona fide resident of Puerto Rico. An individual taking up 
residence in Puerto Rico during the course of the taxable year is not 
entitled for such year to the exclusion provided in section 933.
    (b) Taxable year of change of residence from Puerto Rico. A citizen 
of the United States who changes his residence from Puerto Rico after 
having been a bona fide resident thereof for a period of at least two 
years immediately preceding the date of such change in residence shall 
exclude from his gross income the income derived from sources within 
Puerto Rico which is attributable to that part of such period of Puerto 
Rican residence which preceded the date of such change in residence, 
except amounts received for services performed as an employee of the 
United States or any agency thereof.

[[Page 131]]

    (c) Deductions. In any case in which any amount otherwise 
constituting gross income is excluded from gross income under the 
provisions of section 933, there shall not be allowed as a deduction 
from gross income any items of expenses or losses or other deductions 
(except the deduction under section 151, relating to personal 
exemptions) properly allocable to, or chargeable against, the amounts so 
excluded from gross income.