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TITLE 26-INTERNAL REVENUE CODE not engaged in trade or business within the United States, or (B) for an office or place of business maintained in a foreign country or in a pos- session of the United States by an individ- ual who is a citizen or resident of the United States or by a domestic partnership or a domestic corporation, by a nonresident alien individual temporarily present in the United States for a period or periods not exceeding a total of 90 days during the taxable year and whose compensa- tion for such services does not exceed in the aggregate $3,000. (2) Trading in securities or commodities (A) Stocks and securities (I) In general Trading in stocks or securities through a resident broker, commission agent, cus- todian, or other independent agent. (it) Trading for taxpayer's own account Trading in stocks or securities for the taxpayer's own account, whether by the taxpayer or his employees or through a resident broker, commission agent, custo- dian, or other agent, and whether or not any such employee or agent has discre- tionary authority to make decisions in ef- fecting the transactions. This clause shRll not apply in the case of a dealer in stocks or securities, or in the case of a corpora- tion (other than a corporation which Is, or but for section 542(c)(7) or 543(b)(1)(C) would be, a personal holding company) the principal business of which Is trading in stocks or securities for its own account, if its principal office is in the United States. (B) Commodities (i) In general Trading in commodities through a resi- dent broker, commission agent, custodian, or other Independent agent. (1i) Trading for taxpayer's own account Trading in commodities for the taxpay- er's own account, whether by the taxpay- er or his employees or through a resident broker, commission agent, custodian, or other agent, and whether or not any such employee or agent has discretionary au- thority to make decisions in effecting the transactions. This clause shall not apply in the case of a dealer in commodities. (iiI) Limitation Clauses (i) and (Ii) shall apply only if the commodities are of a kind customarily dealt in on an organized commodity ex- change and if the transaction is of a kind customarily consummated at such place. (C) Limitation Subparagraphs (A)(i) and (B)(i) shall apply only if, at no time during the taxable year, the taxpayer has an office or other fixed place of business in the United States through which or by the direction of which the transactions in stocks or securities, or In commodities, as the case may be, are effect- ed. (c) Effectively connected income, etc. (1) General rule For purposes of this title- (A) In the case of a nonresident alien indi- vidual or a foreign corporation engaged in trade or business within the United States during the taxable year, the rules set forth in paragraphs (2), (3), and (4) shall apply in determining the income, gain, or loss which shall be treated as effectively connected with the conduct of a trade or business within the United States. (B) Except as provided in section 871(d) or sections 882(d) and (e), in the case of a nonresident alien individual or a foreign corporation not engaged in trade or busi- ness within the United States during the taxable year, no income, gain, or loss shall be treated as effectively connected with the conduct of a trade or business within the United States. (2) Periodical, etc., income from sources within United States-factors In determining whether income from sources within the United States of the types described in section 871(a)(1) or section 881(a), or whether gain or loss from sources within the United States from the sale or ex- change of capital assets, is effectively con- nected with the conduct of a trade or business within the United States, the factors taken into account, shall include whether- (A) the income, gain, or loss is derived from assets used in or held for use in the conduct of such trade or business, or (B) the activities of such trade or business were a material factor in the realization of the income, gain, or loss. In determining whether an asset is used in or held for use in the conduct of such trade or business or whether the activities of such trade or business were a material factor in re- alizing an item of income, gain, or loss, due regard shall be given to whether or not such asset or such income, gain, or loss was ac- counted for through such trade or business. In applying this paragraph and paragraph (4), interest referred to in section 861(a)(1)(A) shall be considered income from sources within the United States. (3) Other income from sources within United States All income, gain, or loss from sources within the United States (other than income, gain, or loss to which'paragraph (2) applies) shall be treated as effectively connected with the conduct of a trade or business within the United States. (4) Income from sources without United States (A) Except as provided in subparagraphs (B) and (C), no income, gain, or loss from sources without the United States shall be treated as effectively connected with the conduct of a trade or business within the United States. (B) Income, gain, or loss from sources without the United States shall be treated as effectively connected with the conduct of a trade or business within the United States by a nonresident alien individual or a for- eign corporation if such person has an Page 560 §864