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Sec. 114. Extraterritorial Income [Repealed]

Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
I.R.C. § 114(a) Exclusion
Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
Gross income does not include extraterritorial income.
I.R.C. § 114(b) Exception
Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
Subsection (a) shall not apply to extraterritorial income which is not qualifying foreign trade income as determined under subpart E of part III of subchapter N.
I.R.C. § 114(c) Disallowance Of Deductions
I.R.C. § 114(c)(1) In General
Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
Any deduction of a taxpayer allocated under paragraph (2) to extraterritorial income of the taxpayer excluded from gross income under subsection (a) shall not be allowed.
I.R.C. § 114(c)(2) Allocation
Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
Any deduction of the taxpayer properly apportioned and allocated to the extraterritorial income derived by the taxpayer from any transaction shall be allocated on a proportionate basis between--
I.R.C. § 114(c)(2)(A)
the extraterritorial income derived from such transaction which is excluded from gross income under subsection (a), and
I.R.C. § 114(c)(2)(B)
the extraterritorial income derived from such transaction which is not so excluded.
I.R.C. § 114(d) Denial Of Credits For Certain Foreign Taxes
Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
Notwithstanding any other provision of this chapter, no credit shall be allowed under this chapter for any income, war profits, and excess profits taxes paid or accrued to any foreign country or possession of the United States with respect to extraterritorial income which is excluded from gross income under subsection (a).
I.R.C. § 114(e) Extraterritorial Income
Editor's Note: Section 114, below, before being repealed by Pub. L. 108-357, Sec. 101(a), is generally effective for transactions before January 1, 2005.
For purposes of this section, the term ‘extraterritorial income’ means the gross income of the taxpayer attributable to foreign trading gross receipts (as defined in section 942) of the taxpayer.
(Nov. 15, 2000, Pub. L. 106-519, Sec. 3(a); repealed by Pub. L. 108-357, title I, Sec. 101(a), Oct. 22, 2004, 118 Stat. 1418.)
BACKGROUND NOTES
EFFECTIVE DATE
Effective generally for transactions after September 30, 2000.
EFFECTIVE DATE OF REPEAL
Repeal by Pub. L. 108-357, Sec. 101(a), as amended by Pub. L. 113-295, Div. A, Sec. 219(a), is generally effective for transactions after December 31, 2004. Section 101(d)-(f) provided the following rules:
“(d) TRANSITIONAL RULE FOR 2005 AND 2006-
“(1) IN GENERAL- In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section shall not exceed the applicable percentage of the amount which would have been so included but for this subsection.
“(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the applicable percentage shall be as follows:
“(A) For 2005, the applicable percentage shall be 20 percent.
“(B) For 2006, the applicable percentage shall be 40 percent.
“(3) COORDINATION WITH SECTION 199.—This subsection shall be applied without regard to any deduction allowable under section 199.
“(e) REVOCATION OF ELECTION TO BE TREATED AS DOMESTIC CORPORATION- If, during the 1-year period beginning on the date of the enactment of this Act, a corporation for which an election is in effect under section 943(e) of the Internal Revenue Codeof 1986 revokes such election, no gain or loss shall be recognized with respect to property treated as transferred under clause (ii) of section 943(e)(4)(B) of such Code to the extent such property--
“(1) was treated as transferred under clause (i) thereof, or
“(2) was acquired during a taxable year to which such election applies and before May 1, 2003, in the ordinary course of its trade or business.
“The Secretary of the Treasury (or such Secretary's delegate) may prescribe such regulations as may be necessary to prevent the abuse of the purposes of this subsection.
Editor's Note: Sec. 513(b) of Pub. L. 109-222 struck Pub. L. 108-357, Sec. 101(f), effective on the date of the enactment of Pub. L. 109-222 [Enacted: May 17, 2006
“(f) BINDING CONTRACTS- The amendments made by this section shall not apply to any transaction in the ordinary course of a trade or business which occurs pursuant to a binding contract--
“(1) which is between the taxpayer and a person who is not a related person (as defined in section 943(b)(3) of such Code, as in effect on the day before the date of the enactment of this Act), and
“(2) which is in effect on September 17, 2003, and at all times thereafter.
“For purposes of this subsection, a binding contract shall include a purchase option, renewal option, or replacement option which is included in such contract and which is enforceable against the seller or lessor.”