[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: 26CFR1.996-6]

[Page 733]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.996-6  Effectively connected income.

    In the case of a shareholder who is a nonresident alien individual 
or a foreign corporation, trust, or estate, amounts taxable as dividends 
by reason of the application of Sec. 1.995-4 (relating to gain on 
disposition of stock in a DISC), amounts treated under Sec. 1.996-1 as 
distributed out of accumulated DISC income, and amounts deemed 
distributed under Sec. 1.995-2(a) (1) through (4) shall be treated as 
gains and distributions which are effectively connected with the conduct 
of a trade or business conducted through a permanent establishment of 
such shareholder within the United States, and shall be subject to tax 
in accordance with the provisions of section 871(b) and the regulations 
thereunder in the case of nonresident alien individuals, trusts, or 
estates, or section 882 and the regulations thereunder in the case of 
foreign corporations. In no case, however shall other income of such 
shareholder be taxable as effectively connected with the conduct of a 
trade or business through a permanent establishment in the United States 
solely because of the application of this section.

[T.D. 7324, 39 FR 35124, Sept. 30, 1974]