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TITLE 26-INTERNAL REVENUE CODE (2) for purposes of the Guam territorial income tax, Guam shall be treated as Includ- ing the United States, and (3) such individual is hereby relieved of li- ability for income tax for such year to the Ju- risdiction (the United States or Guam) other than the Jurisdiction with which he is re- quired to file under subsection (b). (d) Special rules for estimated income tax If there is reason to believe that this section will apply to an individual for the taxable year, then- (1) he shall file any declaration of estimat- ed income tax (and all amendments thereto) with the Jurisdiction with which he would be required to file a return for such year under subsection (b) if his taxable year closed on the date he is required to file such declara- tion, (2) he is hereby relieved of any liability to file a declaration of estimated income tax (and amendments thereto) for such taxable year to the other jurisdiction, and (3) his liability for underpayments of esti- mated income tax shall be to the Jurisdiction with which he is required to file his return for the taxable year (determined under sub- section (b)). (Added Pub. L. 92-606, § l(a), Oct. 31, 1972, 86 Stat. 1494.) EFFEcTrIvE DATE Section 2 of Pub. L. 92-606 provided in part that: "The amendments made by section 1 [enacting this section and section 6687 of this title, amending sec- tions 931, 932, 7654 and 7701 of this title, section 1421i of Title 48, Territories and Insular Possessions, and enacting provisions set out as notes under sections 881 and 1442 of this title] (other than section I(e)) [amending sections 881 and 1442 of this title] shall apply with respect to taxable years beginning after December 31, 1972." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 932, 7654 of this title. § 936. Puerto Rico and possession tax credit (a) Allowance of credit (1) In general Except as provided in paragraph (2), in the case of a domestic corporation which elects the application of this section, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to the portion of the tax which is attributable to taxable income, from sources without the United States, from the active conduct of a trade or business within a possession of the United States, and from qualified possession source investment income, if the conditions of both subparagraph (A) and subparagraph (B) are satisfied: (A) 3-year period If 80 percent or more of the gross income of such domestic corporation for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession of the United States (determined without regard to section 904(f)); and (B) Trade or business If 50 percent or more of the gross income of such domestic corporation for such period or such part thereof was derived from the active conduct of a trade or busi- ness within a possession of the United States. (2) Credit not allowed against certain taxes The credit provided by paragraph (1) shall not be allowed against the tax imposed by- (A) section 56 (relating to minimum tax), (B) section 531 (relating to the tax on ac- cumulated earnings), (C) section 541 (relating to personal hold- ing company taxi, or [(D) Repealed. Pub. L. 94-455, title XIX, § 1901(b)(37)(B), Oct. 4, 1976, 90 Stat. 1803.] (E) section 1351 (relating to recoveries of foreign expropriation losses). (b) Amounts received in United States In determining taxable income for purposes of subsection (a), there shall not be taken into account as income from sources without the United States any gross income which was re- ceived by such domestic corporation within the United States, whether derived from sources within or without the United States. (c) Treatment of certain foreign taxes For purposes of this title, any tax of a foreign country or a possession of the United States which is paid or accrued with respect to taxable income which is taken into account in comput- ing the credit under subsection (a) shall not be treated as income, war profits, or excess profits taxes paid or accrued to a foreign country or possession of the United States, and no deduc- tion shall be allowed under this title with re- spect to any amounts so paid or accrued. (d) Definitions For purposes of this section- (1) Possession The term "possession of the United States" includes the Commonwealth of Puerto Rico, but does not include the Virgin Islands of the United States. (2) Qualified possession source investment income The term "qualified possession source in- vestment income" means gross income which- (A) is from sources within a possession of the United States in which a trade or busi- ness is actively conducted, and (B) the taxpayer establishes to the satis- faction of the Secretary is attributable to the investment in such possession (for use therein) of funds derived from the active conduct of a trade or business in such pos- session, or from such investment, less the deductions properly apportioned or allocated thereto. (e) Election (1) Period of election The election provided in subsection (a) shall be made at such time and in such manner as the Secretary may by regulations prescribe. Any such election shall apply to the first tax- § 936 Page 598