Larken Rose

[Famspear]

Sorry Steve, you haven't come up with anything. Again, either something is in gross income, or it's not. If it's in gross income, then you can't get to zero taxable income without taking deductions. If it's not in gross income, then it's excluded from gross income under the law. Either way, you're wrong.

PS: In citing section 882, you have just illustrated my point.

[wserra]

That must be it - you're all on diets.

[SteveSy]

Sorry Steve, you haven't come up with anything. Again, either something is in gross income, or it's not. If it's in gross income, then you can't get to zero taxable income without taking deductions. If it's not in gross income, then it's excluded from gross income under the law. Either way, you're wrong.

PS: In citing section 882, you have just illustrated my point.

Alright, since none of you have read the regulations under 861, except to maybe skim through them I'll show you why you're wrong.

A class of gross income is determined by section 61, see 1.861-8 (a)(3). In order to determine your taxable income all gross income must be classed. In the case of the example I provided, the foreign corporation has administrative costs that fall across both income from within and without the U.S. In order to apportion the deductions of these expenses correctly it must apply to a class or statutory grouping of gross income. Otherwise the corporation would be forced to apply the entire expense to its U.S. gross income, because deductions apply only to gross income. A statutory grouping of gross income may include or entirely consist of excluded gross income. When I say excluded gross income, I'm not saying its excluded from gross income, its excluded from tax. See 1.861-8(a)(3) again.

That should get you started, 882 is context specific, it is not excluding an item of income from gross income throughout the code.

[Cpt Banjo]

That has context...it's not referring to section 61.

Don't confuse 882(b) with 882(a)(2). The latter section specifically refers to the tax imposed on foreign corporations by Section 882(a)(1) and provides that in determining taxable income for purposes of the Section 882(a)(1) tax, gross income includes only gross income effectively connected with the conduct of a trade or business within the US.

882(b), on the other hand, is not confined to the tax referred to in 882(a)(1). It is the foreign corporation counterpart to Section 872(a), which covers nonresident alien individuals.

[Famspear]

That should get you started, 882 is context specific, it is not excluding an item of income from gross income throughout the code.

Sorry, Steve, but section 882 is the law. If it doesn't exclude some income (that would otherwise be gross income under sec. 61) from "gross income", then there is no exclusion under section 882. If it DOES exclude some income, then there is an exclusion. What part of this do you not understand?

You were wrong.

I'm not sure whether your problem was not understanding terminology, or what.

[SteveSy]

That should get you started, 882 is context specific, it is not excluding an item of income from gross income throughout the code.

Sorry, Steve, but section 882 is the law. If it doesn't exclude some income (that would otherwise be gross income under sec. 61) from "gross income", then there is no exclusion under section 882. If it DOES exclude some income, then there is an exclusion. What part of this do you not understand?

You were wrong.

I'm not sure whether your problem was not understanding terminology, or what.

882 is for a specific purpose...it's not global. I doubt many of you even know what points you there.

I told you why YOU were wrong, your refusal to read the regulations is no fault of mine.

[Famspear]

That should get you started, 882 is context specific, it is not excluding an item of income from gross income throughout the code.

Sorry, Steve, but section 882 is the law. If it doesn't exclude some income (that would otherwise be gross income under sec. 61) from "gross income", then there is no exclusion under section 882. If it DOES exclude some income, then there is an exclusion. What part of this do you not understand?

You were wrong.

I'm not sure whether your problem was not understanding terminology, or what.

882 is for a specific purpose...it's not global. I doubt many of you even know what points you there.

I told you why YOU were wrong, your refusal to read the regulations is no fault of mine.

You've lost me again. What difference does it make whether section 882 is "global" or not. You were wrong. You argued that something could be "gross income under section 61" and yet not be taxable income under section 63, even without any exclusions or deductions. I told you that you were wrong. You cannot get from positive gross income to zero taxable income without something in the law that gives you either exclusions, exemptions or deductions. Section 882 is THE LAW. It either gives exclusions, exemption or deductions, or it doesn't. If it does, then you are wrong and I am right. If it doesn't then you are wrong as well.

What part of this do you not understand?

[SteveSy]

You've lost me again. What difference does it make whether section 882 is "global" or not. You were wrong. You argued that something could be "gross income under section 61" and yet not be taxable income under section 63, even without any exclusions or deductions. I told you that you were wrong. You cannot get from positive gross income to zero taxable income without something in the law that gives you either exclusions, exemptions or deductions. Section 882 is THE LAW. It either gives exclusions, exemption or deductions, or it doesn't. If it does, then you are wrong and I am right. If it doesn't then you are wrong as well.

What part of this do you not understand?

This is pointless, I even gave you the section that shows you are wrong. You're taking 882 which excludes gross income from 862 out of context and thinking it means the income is excluded from gross income in general. 882 is for the imposition of the tax, its excluding gross income from tax and only in that circumstance. However, its still gross income throughout the rest of the code.

Again, your refusal to read the regulations is your fault not mine.

[Cpt Banjo]

882 is for a specific purpose...it's not global. I doubt many of you even know what points you there.

And I doubt if you've even read 882. Let's try again.

First of all, there's nothing in the language of 882(b) to suggest that it's confined to the tax imposed by 882(a)(1).

Second, if 882(b) were confined to the 882(a)(1) tax, you'd have a contradiction. Why? Because 882(a)(2) says that for purposes of the 882(a)(1) tax, gross income includes only income that's effectively connected with the conduct of a trade or business within the US. But 882(b)(1) also includes within gross income US-sourced income that's not effectively connected with the conduct of a trade or business within the US. Consequently, it's bleeding obvious that 882(b) isn't referring to the 882(a)(1) tax, because if it were it would negate 882(a)(2).

[Famspear]

You've lost me again. What difference does it make whether section 882 is "global" or not. You were wrong. You argued that something could be "gross income under section 61" and yet not be taxable income under section 63, even without any exclusions or deductions. I told you that you were wrong. You cannot get from positive gross income to zero taxable income without something in the law that gives you either exclusions, exemptions or deductions. Section 882 is THE LAW. It either gives exclusions, exemption or deductions, or it doesn't. If it does, then you are wrong and I am right. If it doesn't then you are wrong as well.

What part of this do you not understand?

This is pointless, I even gave you the section that shows you are wrong. You're taking 882 which excludes gross income from 862 out of context and thinking it means the income is excluded from gross income in general.

Again, your refusal to read the regulations is your fault not mine.

OK, Steve, I think we're just not communicating. Forget about the regulations. You don't need to read the regs, and I don't either.

Why are you adding the words "in general"? You're losing me.

Again, section 882 is THE LAW. EITHER IT EXCLUDES SOME INCOME OR IT DOESN'T. Your argument was that something could be excluded from gross income WITHOUT ANYTHING IN THE LAW THAT CREATED THAT EXCLUSION. By arguing that 882 excludes any income at all, you are defeating your own argument.

For the gazillionth time: If something would otherwise be includible in gross income under 61, you cannot get that item down to "zero section 63 taxable income" without either SOMETHING IN THE LAW THAT EXCLUDES THAT ITEM FROM INCOME or something in the law that gives you some offsetting deductions, etc. There is no way around that, Steve.

I still don't see what you're not understanding about this. I was right. You were wrong.

[SteveSy]

882 is for a specific purpose...it's not global. I doubt many of you even know what points you there.

And I doubt if you've even read 882. Let's try again.

First of all, there's nothing in the language of 882(b) to suggest that it's confined to the tax imposed by 881(a)(1).

Second, if 882(b) were confined to the 881(a)(1) tax, you'd have a contradiction. Why? Because 881(a)(2) says that for purposes of the 881(a)(1) tax, gross income includes only income that's effectively connected with the conduct of a trade or business within the US. But 882(b)(1) also includes within gross income US-sourced income that's not effectively connected with the conduct of a trade or business within the US. Consequently, it's bleeding obvious that 882(b) isn't referring to the 881(a)(1) tax, because if it were it would negate 882(a)(2).

882 is excluding certain income from gross income when imposing a tax. It only applies in that circumstance. However, its still gross income and is treated as such throughout the code except in 882 and only in 882.

[SteveSy]

You've lost me again. What difference does it make whether section 882 is "global" or not. You were wrong. You argued that something could be "gross income under section 61" and yet not be taxable income under section 63, even without any exclusions or deductions. I told you that you were wrong. You cannot get from positive gross income to zero taxable income without something in the law that gives you either exclusions, exemptions or deductions. Section 882 is THE LAW. It either gives exclusions, exemption or deductions, or it doesn't. If it does, then you are wrong and I am right. If it doesn't then you are wrong as well.

What part of this do you not understand?

This is pointless, I even gave you the section that shows you are wrong. You're taking 882 which excludes gross income from 862 out of context and thinking it means the income is excluded from gross income in general.

Again, your refusal to read the regulations is your fault not mine.

OK, Steve, I think we're just not communicating. Forget about the regulations. You don't need to read the regs, and I don't either.

Why are you adding the words "in general"? You're losing me.

Again, section 882 is THE LAW. EITHER IT EXCLUDES SOME INCOME OR IT DOESN'T. Your argument was that something could be excluded from gross income WITHOUT ANYTHING IN THE LAW THAT CREATED THAT EXCLUSION. By arguing that 882 excludes any income at all, you are defeating your own argument.

For the gazillionth time: If something would otherwise be includible in gross income under 61, you cannot get that item down to "zero section 63 taxable income" without either SOMETHING IN THE LAW THAT EXCLUDES THAT ITEM FROM INCOME or something in the law that gives you some offsetting deductions, etc. There is no way around that, Steve.

I still don't see what you're not understanding about this. I was right. You were wrong.

882 has nothing whatsoever to do with 61, got it? Read 1.861-8(a)(3) it specifically tells you to include gross income found in section 61 not effectively connected with the U.S. if you are a foreign corporation.

[Famspear]

[Section] 882 is excluding certain income from gross income when imposing a tax. It only applies in that circumstance. However, its still gross income and is treated as such throughout the code except in 882 and only in 882.

In other words, Steve, you were wrong.

Unless you're now going to argue that section 882 is not "a law."

[Cpt Banjo]

882 is excluding certain income from gross income when imposing a tax. It only applies in that circumstance. However, its still gross income and is treated as such throughout the code except in 882 and only in 882.

To what circumstance is 882(b)(1) referring? I've already shown that it's impossible for it to apply to the 882(a)(1) tax, so when does it apply?

[Famspear]

882 has nothing whatsoever to do with 61, got it? Read 1.861-8(a)(3) it specifically tells you to include gross income found in section 61 not effectively connected with the U.S. if you are a foreign corporation.

Whether 882 has "something to do" with 61 (whatever that means) is not the issue. Stop changing the subject.

Section 882 excludes certain income from gross income. It's a law. You were wrong. I was right. If you use 882 to get from "gross income" down to "zero taxable income", then you are using A LAW THAT PROVIDES AN EXCLUSION, by your own admission.

[SteveSy]

[Section] 882 is excluding certain income from gross income when imposing a tax. It only applies in that circumstance. However, its still gross income and is treated as such throughout the code except in 882 and only in 882.

In other words, Steve, you were wrong.

Unless you're now going to argue that section 882 is not "a law."

Yes 882 is the law. I'm not wrong. You're thinking 882 applies to totally excludes gross income listed in 61 and it doesn't. Everywhere but in 882 its treated as gross income.

[webhick]

100 posts. Topic locked. Feel free to start a new one.

[Imalawman]

100 posts. Topic locked. Feel free to start a new one.

Sorry let me just have the last word...

The problem is we're dealing with international tax law sections. I just spent a year studying this stuff and it is very complex. It rivals partnership tax. Without a foundation in tax law it is impossible to fully grasp the point of these sections of the code. That's not a good thing, but its the truth. Steve, you delude yourself that you're right and the experts are wrong. But tell me this - why should all of my law professors who have written treatises on the subject be ignored and I agree with your version? Steve, trust me, you are wrong.