
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC114]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
         PART III--ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
 
Sec. 114. Extraterritorial income


(a) Exclusion

    Gross income does not include extraterritorial income.

(b) Exception

    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.

(c) Disallowance of deductions

                           (1) In general

        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.

                           (2) Allocation

        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--
            (A) the extraterritorial income derived from such 
        transaction which is excluded from gross income under subsection 
        (a), and
            (B) the extraterritorial income derived from such 
        transaction which is not so excluded.

(d) Denial of credits for certain foreign taxes

    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).

(e) Extraterritorial income

    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.

(Added Pub. L. 106-519, Sec. 3(a), Nov. 15, 2000, 114 Stat. 2423.)


                            Prior Provisions

    A prior section 114, act Aug. 16, 1954, ch. 736, 68A Stat. 35, 
related to sports programs conducted for American National Red Cross, 
prior to repeal by Pub. L. 101-508, title XI, Sec. 11801(a)(8), Nov. 5, 
1990, 104 Stat. 1388-520.


                             Effective Date

    Section applicable to transactions after Sept. 30, 2000, with 
special rules relating to existing foreign sales corporations, see 
section 5 of Pub. L. 106-519, set out as a note under section 941 of 
this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 56, 903, 941, 943 of this 
title.
