Plain Language of Change:
The Act modifies the source of income from sales of inventory and now the source is determined solely on the basis of production activities
Gains, profits and income from the sale or exchange of inventory property produced partly in, and partly outside, the U.S. is allocated and apportioned on the basis of the location of production with respect to the property
For example, income derived from the sale of inventory property to a foreign jurisdiction is sourced wholly within the U.S. if the property was produced entirely in the U.S., even if title passage occurred elsewhere. Likewise, income derived from inventory property sold in the U.S., but produced entirely in another country, is sourced in that country even if title passage occurs in the U.S. If the inventory property is produced partly in, and partly outside, the U.S., however, the income derived from its sale is sourced partly in the U.S.
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