§ 937. Residence and source rules involving possessions
(a)
Bona fide resident
For purposes of this subpart, section
865
(g)(3), section
876, section
881
(b), paragraphs (2) and (3) of section
901
(b), section
957(c), section
3401
(a)(8)(C), and section
7654
(a), except as provided in regulations, the term “bona fide resident” means a person—
(1)
who is present for at least 183 days during the taxable year in Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands, as the case may be, and
(2)
who does not have a tax home (determined under the principles of section
911
(d)(3) without regard to the second sentence thereof) outside such specified possession during the taxable year and does not have a closer connection (determined under the principles of section
7701
(b)(3)(B)(ii)) to the United States or a foreign country than to such specified possession.
(b)
Source rules
Except as provided in regulations, for purposes of this title—
(1)
except as provided in paragraph (2), rules similar to the rules for determining whether income is income from sources within the United States or is effectively connected with the conduct of a trade or business within the United States shall apply for purposes of determining whether income is from sources within a possession specified in subsection (a)(1) or effectively connected with the conduct of a trade or business within any such possession, and
(2)
any income treated as income from sources within the United States or as effectively connected with the conduct of a trade or business within the United States shall not be treated as income from sources within any such possession or as effectively connected with the conduct of a trade or business within any such possession.
(c)
Reporting requirement
(1)
In general
If, for any taxable year, an individual takes the position for United States income tax reporting purposes that the individual became, or ceases to be, a bona fide resident of a possession specified in subsection (a)(1), such individual shall file with the Secretary, at such time and in such manner as the Secretary may prescribe, notice of such position.
(2)
Transition rule
If, for any of an individual’s 3 taxable years ending before the individual’s first taxable year ending after the date of the enactment of this subsection, the individual took a position described in paragraph (1), the individual shall file with the Secretary, at such time and in such manner as the Secretary may prescribe, notice of such position.