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TITLE 26-INTERNAL REVENUE CODE Virgin Islands, except to the extent provided in subsection (b) or (c). (M) Exception for certain domestic and Virgin Islands corporations In the case of a domestic corporation or a Virgin Islands corporation, subsection (a) shall not apply (if the information required by sub- section (d) is supplied) to the extent such cor- poration derived its income from sources with- out the United States if the conditions of both paragraph (1) and paragraph (2) are satisfied: (1) Three-year period If 80 percent or more of the gross income of such corporation for the 3-year period imme- diately preceding the close of the taxable year (or for such part of such period immedi. ately preceding the close of such taxable year as may be applicable) was derived from sources within the Virgin Islands; and (2) Trade or business If 50 percent or more of the gross income of such corporation for such period or such part thereof was derived from the active conduct of a trade or business within the Virgin Is- lands. For purposes of the preceding sentence, the gross income of a Virgin Islands corporation, and the sources from which the income of such corporation is derived, shall be determined as if such corporation were a domestic corporation. (c) Exception for certain residents of the Virgin Is- lands Subsection (a) shall not apply in the case of an individual citizen of the United States who is a bona fide resident of the Virgin Islands during the entire taxable year (if the informa- tion required by subsection (d) is supplied), to the extent his income is derived from sources within the Virgin Islands (except that subsec- tion (a) shall apply in the case of amounts re- ceived for services performed as an employee of the United States or any agency thereof). For purposes of the preceding sentence, gain or loss from the sale or exchange of any security (as defined in section 165(g)(2)) shall not be treat- ed as derived from sources within the Virgin Is- lands. (d) Requirement to supply information Subsections (b) and (c) shall apply only in the case of persons who supply (at such time and in such manner as the Secretary may by regula- tions prescribe) such information as the Secre- tary may by regulations prescribe for purposes of determining the applicability of such subsec- tions. (Added Pub. L. 86-779, §4(a)(1), Sept. 14, 1960, 74 Stat. 998, and amended ub. L. 94-455, title XIX, §§ 1901(a)(118), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1784, 1834.) AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455, § 1901(a)(118), struck out "For the purposes of this subsection, all amounts received by such corporation within the United States, whether derived from sources within or without the United States, shall be considered as being derived from sources within the United States" following "were a domestic corporation". Subsec. d. Pub. L. 94-455, § 1906(b)(13)(A). struck out "or his delegate" following "Secretary" in two places. EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (b) by section 1901(a)(118) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EFFECTxVE DATE Section 4(e)(1) of Pub. L. 86-779 provided that: "The amendments made by subsection (a) (adding this sec- tion] shall apply to tax liability incurred with respect to taxable years beginning on or after January 1, 1960." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 48 of this title. § 935. Coordination of United States and Guam Indi- vidual income taxes (a) Application of section This section shall apply to any individual for the taxable year who- (1) is a resident of Guam, (2) is a citizen of Guam but not otherwise a citizen of the United States, (3) has income derived from Guam for the taxable year and is a citizen or resident of the United States or (4) files a Joint return for the taxable year with an individual who satisfies paragraph (1), (2), or (3) for the taxable year. (b) Filing requirement (1) In general Each individual to whom this section ap- plies for the taxable year shall file his income tax return for the taxable year- (A) with the United States, if he is a resi- dent of the United States, (B) with Guam, if he is a resident of Guam, and (C) if neither subparagraph (A) nor sub- paragraph (B) applies- (I) with Guam, if he is a citizen of Guam but not otherwise a citizen of the United States, or (ii) with the United States, if clause (I) does not apply. (2) Determination date For purposes of this section, determinations of residence and citizenship for the taxable year shall be made as of the close of the tax- able year. (3) Special rule for joint returns In the case of a Joint return, this subsection shall be applied on the basis of the residence and citizenship of the spouse who has the greater adjusted gross income (determined without regard to community property laws) for the taxable year. (cW Extent of income tax liability In the case of any individual to whom this section applies for the taxable year- (1) for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the United States shall be treated as includ- ing Guam, 71-999 0 - 78 - 40 (Vol. 7) Page 597 § 935