Tax on unincorporated businesses — Definition.

For the purposes of this chapter (not alone of this subchapter) and unless otherwise required by the context, the term “unincorporated business” means any trade or business, conducted or engaged in by any individual, whether resident or nonresident, statutory or common-law trust, estate, partnership, or limited or special partnership, society, association, executor, administrator, receiver, trustee, liquidator, conservator, committee assignee, or by any other entity or fiduciary, other than a trade or business conducted or engaged in by any corporation and include any trade or business which if conducted or engaged in by a corporation would be taxable under subchapter VII of this chapter . The term “unincorporated business” does not include:

(1) A trade or a business which by law, customs, or ethics cannot be incorporated;

(2) A trade, a business, or a profession which can be incorporated only under Chapter 5 of Title 29 ;

(3) A trade or business in which more than 80% of the gross income is derived from the personal services actually rendered by the individuals or the members of the partnership or other entity in the conducting or the carrying on of a trade or a business and in which capital is not a material income-producing factor;

(4) A trade or a business engaged in by a blind person licensed by the District of Columbia pursuant to An Act To authorize the operation of stands in Federal buildings by blind persons, to enlarge the economic opportunities of the blind, and for other purposes (20 U.S.C. § 107 et seq.);

(5) A Qualified High Technology Company; or

(6) For tax years beginning after December 31, 2014, a trade or business that arises solely by reason of the purchase, holding, or sale of, or the entering, maintaining, or terminating of positions in, stocks, securities, or commodities for the taxpayer’s own account; provided, that this paragraph shall not apply to:

(A) A taxpayer that holds property, or maintains positions, as stock in trade, inventory, or for sale to customers in the ordinary course of the taxpayer’s trade or business;

(B) A taxpayer that acquires debt instruments in the ordinary course of the taxpayer’s trade or business for funds loaned or services rendered; or

(C) A taxpayer that holds any of the following that is not traded on an established securities market:

(i) Stock in a real estate investment trust; or

(ii) A partnership interest.