All income from such services is sourced
under the SPOCI rules, except to the extent that the taxpayer can demonstrate that value was added outside space and international waters.
Traditional understanding of how income should be sourced
are less satisfying in the electronic marketplace.
resident's losses attributable to a foreign office would be foreign sourced
if a gain would have been taxable by a foreign country where the highest marginal tax rate is at least 10%.
A reciprocal agreement would normally require the individual to remit tax to the state of his or her residence, rather than to the state to which the income is sourced
[sections] 1.865-2(b)(2), loss recognized on the disposition of an 80-percent owned foreign affiliate will reduce foreign-source passive income if, within the past five years, the seller (or a consolidated group member) recognized gain on the disposition of a foreign affiliate that was sourced
under section 865(f).
If a sale, the income would be sourced
to the place where title to the property passes to the buyer.
[sections] 1.863-l(b)(1), which provides that income derived from the sale of natural resources located within the United States (such as oil, gas, or timber) shall ordinarily be sourced
to the United States, regardless of the place of actual sale (a "uni-source" rule).
Secondly, the IRS concluded that even if the royalties had to be sourced
to the place of use, the taxpayer failed to establish a "reasonable connection" between B's computer sales and the place of use of A's software rights.