26 U.S.C. § 7701 : US Code - Section 7701: Definitions

Search 26 U.S.C. § 7701 : US Code - Section 7701: Definitions

      (a) When used in this title, where not otherwise distinctly
    expressed or manifestly incompatible with the intent thereof - 
      (1) Person
        The term "person" shall be construed to mean and include an
      individual, a trust, estate, partnership, association, company or
      corporation.
      (2) Partnership and partner
        The term "partnership" includes a syndicate, group, pool, joint
      venture, or other unincorporated organization, through or by
      means of which any business, financial operation, or venture is
      carried on, and which is not, within the meaning of this title, a
      trust or estate or a corporation; and the term "partner" includes
      a member in such a syndicate, group, pool, joint venture, or
      organization.
      (3) Corporation
        The term "corporation" includes associations, joint-stock
      companies, and insurance companies.
      (4) Domestic
        The term "domestic" when applied to a corporation or
      partnership means created or organized in the United States or
      under the law of the United States or of any State unless, in the
      case of a partnership, the Secretary provides otherwise by
      regulations.
      (5) Foreign
        The term "foreign" when applied to a corporation or partnership
      means a corporation or partnership which is not domestic.
      (6) Fiduciary
        The term "fiduciary" means a guardian, trustee, executor,
      administrator, receiver, conservator, or any person acting in any
      fiduciary capacity for any person.
      (7) Stock
        The term "stock" includes shares in an association, joint-stock
      company, or insurance company.
      (8) Shareholder
        The term "shareholder" includes a member in an association,
      joint-stock company, or insurance company.
      (9) United States
        The term "United States" when used in a geographical sense
      includes only the States and the District of Columbia.
      (10) State
        The term "State" shall be construed to include the District of
      Columbia, where such construction is necessary to carry out
      provisions of this title.
      (11) Secretary of the Treasury and Secretary
        (A) Secretary of the Treasury
          The term "Secretary of the Treasury" means the Secretary of
        the Treasury, personally, and shall not include any delegate of
        his.
        (B) Secretary
          The term "Secretary" means the Secretary of the Treasury or
        his delegate.
      (12) Delegate
        (A) In general
          The term "or his delegate" - 
            (i) when used with reference to the Secretary of the
          Treasury, means any officer, employee, or agency of the
          Treasury Department duly authorized by the Secretary of the
          Treasury directly, or indirectly by one or more redelegations
          of authority, to perform the function mentioned or described
          in the context; and
            (ii) when used with reference to any other official of the
          United States, shall be similarly construed.
        (B) Performance of certain functions in Guam or American Samoa
          The term "delegate," in relation to the performance of
        functions in Guam or American Samoa with respect to the taxes
        imposed by chapters 1, 2, and 21, also includes any officer or
        employee of any other department or agency of the United
        States, or of any possession thereof, duly authorized by the
        Secretary (directly, or indirectly by one or more redelegations
        of authority) to perform such functions.
      (13) Commissioner
        The term "Commissioner" means the Commissioner of Internal
      Revenue.
      (14) Taxpayer
        The term "taxpayer" means any person subject to any internal
      revenue tax.
      (15) Military or naval forces and armed forces of the United
        States
        The term "military or naval forces of the United States" and
      the term "Armed Forces of the United States" each includes all
      regular and reserve components of the uniformed services which
      are subject to the jurisdiction of the Secretary of Defense, the
      Secretary of the Army, the Secretary of the Navy, or the
      Secretary of the Air Force, and each term also includes the Coast
      Guard. The members of such forces include commissioned officers
      and personnel below the grade of commissioned officers in such
      forces.
      (16) Withholding agent
        The term "withholding agent" means any person required to
      deduct and withhold any tax under the provisions of section 1441,
      1442, 1443, or 1461.
      (17) Husband and wife
        As used in sections 682 and 2516, if the husband and wife
      therein referred to are divorced, wherever appropriate to the
      meaning of such sections, the term "wife" shall be read "former
      wife" and the term "husband" shall be read "former husband"; and,
      if the payments described in such sections are made by or on
      behalf of the wife or former wife to the husband or former
      husband instead of vice versa, wherever appropriate to the
      meaning of such sections, the term "husband" shall be read "wife"
      and the term "wife" shall be read "husband."
      (18) International organization
        The term "international organization" means a public
      international organization entitled to enjoy privileges,
      exemptions, and immunities as an international organization under
      the International Organizations Immunities Act (22 U.S.C. 288-
      288f).
      (19) Domestic building and loan association
        The term "domestic building and loan association" means a
      domestic building and loan association, a domestic savings and
      loan association, and a Federal savings and loan association - 
          (A) which either (i) is an insured institution within the
        meaning of section 401(a) (!1) of the National Housing Act (12
        U.S.C., sec. 1724(a)), or (ii) is subject by law to supervision
        and examination by State or Federal authority having
        supervision over such associations;

          (B) the business of which consists principally of acquiring
        the savings of the public and investing in loans; and
          (C) at least 60 percent of the amount of the total assets of
        which (at the close of the taxable year) consists of - 
            (i) cash,
            (ii) obligations of the United States or of a State or
          political subdivision thereof, and stock or obligations of a
          corporation which is an instrumentality of the United States
          or of a State or political subdivision thereof, but not
          including obligations the interest on which is excludable
          from gross income under section 103,
            (iii) certificates of deposit in, or obligations of, a
          corporation organized under a State law which specifically
          authorizes such corporation to insure the deposits or share
          accounts of member associations,
            (iv) loans secured by a deposit or share of a member,
            (v) loans (including redeemable ground rents, as defined in
          section 1055) secured by an interest in real property which
          is (or, from the proceeds of the loan, will become)
          residential real property or real property used primarily for
          church purposes, loans made for the improvement of
          residential real property or real property used primarily for
          church purposes, provided that for purposes of this clause,
          residential real property shall include single or multifamily
          dwellings, facilities in residential developments dedicated
          to public use or property used on a nonprofit basis for
          residents, and mobile homes not used on a transient basis,
            (vi) loans secured by an interest in real property located
          within an urban renewal area to be developed for
          predominantly residential use under an urban renewal plan
          approved by the Secretary of Housing and Urban Development
          under part A or part B of title I of the Housing Act of 1949,
          as amended, or located within any area covered by a program
          eligible for assistance under section 103 of the
          Demonstration Cities and Metropolitan Development Act of
          1966, as amended, and loans made for the improvement of any
          such real property,
            (vii) loans secured by an interest in educational, health,
          or welfare institutions or facilities, including structures
          designed or used primarily for residential purposes for
          students, residents, and persons under care, employees, or
          members of the staff of such institutions or facilities,
            (viii) property acquired through the liquidation of
          defaulted loans described in clause (v), (vi), or (vii),
            (ix) loans made for the payment of expenses of college or
          university education or vocational training, in accordance
          with such regulations as may be prescribed by the Secretary,
            (x) property used by the association in the conduct of the
          business described in subparagraph (B), and
            (xi) any regular or residual interest in a REMIC, but only
          in the proportion which the assets of such REMIC consist of
          property described in any of the preceding clauses of this
          subparagraph; except that if 95 percent or more of the assets
          of such REMIC are assets described in clauses (i) through
          (x), the entire interest in the REMIC shall qualify.

        At the election of the taxpayer, the percentage specified in
        this subparagraph shall be applied on the basis of the average
        assets outstanding during the taxable year, in lieu of the
        close of the taxable year, computed under regulations
        prescribed by the Secretary. For purposes of clause (v), if a
        multifamily structure securing a loan is used in part for
        nonresidential purposes, the entire loan is deemed a
        residential real property loan if the planned residential use
        exceeds 80 percent of the property's planned use (determined as
        of the time the loan is made). For purposes of clause (v),
        loans made to finance the acquisition or development of land
        shall be deemed to be loans secured by an interest in
        residential real property if, under regulations prescribed by
        the Secretary, there is reasonable assurance that the property
        will become residential real property within a period of 3
        years from the date of acquisition of such land; but this
        sentence shall not apply for any taxable year unless, within
        such 3-year period, such land becomes residential real
        property. For purposes of determining whether any interest in a
        REMIC qualifies under clause (xi), any regular interest in
        another REMIC held by such REMIC shall be treated as a loan
        described in a preceding clause under principles similar to the
        principles of clause (xi); except that, if such REMIC's are
        part of a tiered structure, they shall be treated as 1 REMIC
        for purposes of clause (xi).
      (20) Employee
        For the purpose of applying the provisions of section 79 with
      respect to group-term life insurance purchased for employees, for
      the purpose of applying the provisions of sections 104, 105, and
      106 with respect to accident and health insurance or accident and
      health plans, and for the purpose of applying the provisions of
      subtitle A with respect to contributions to or under a stock
      bonus, pension, profit-sharing, or annuity plan, and with respect
      to distributions under such a plan, or by a trust forming part of
      such a plan, and for purposes of applying section 125 with
      respect to cafeteria plans, the term "employee" shall include a
      full-time life insurance salesman who is considered an employee
      for the purpose of chapter 21, or in the case of services
      performed before January 1, 1951, who would be considered an
      employee if his services were performed during 1951.
      (21) Levy
        The term "levy" includes the power of distraint and seizure by
      any means.
      (22) Attorney General
        The term "Attorney General" means the Attorney General of the
      United States.
      (23) Taxable year
        The term "taxable year" means the calendar year, or the fiscal
      year ending during such calendar year, upon the basis of which
      the taxable income is computed under subtitle A. "Taxable year"
      means, in the case of a return made for a fractional part of a
      year under the provisions of subtitle A or under regulations
      prescribed by the Secretary, the period for which such return is
      made.
      (24) Fiscal year
        The term "fiscal year" means an accounting period of 12 months
      ending on the last day of any month other than December.
      (25) Paid or incurred, paid or accrued
        The terms "paid or incurred" and "paid or accrued" shall be
      construed according to the method of accounting upon the basis of
      which the taxable income is computed under subtitle A.
      (26) Trade or business
        The term "trade or business" includes the performance of the
      functions of a public office.
      (27) Tax Court
        The term "Tax Court" means the United States Tax Court.
      (28) Other terms
        Any term used in this subtitle with respect to the application
      of, or in connection with, the provisions of any other subtitle
      of this title shall have the same meaning as in such provisions.
      (29) Internal Revenue Code
        The term "Internal Revenue Code of 1986" means this title, and
      the term "Internal Revenue Code of 1939" means the Internal
      Revenue Code enacted February 10, 1939, as amended.
      (30) United States person
        The term "United States person" means - 
          (A) a citizen or resident of the United States,
          (B) a domestic partnership,
          (C) a domestic corporation,
          (D) any estate (other than a foreign estate, within the
        meaning of paragraph (31)), and
          (E) any trust if - 
            (i) a court within the United States is able to exercise
          primary supervision over the administration of the trust, and
            (ii) one or more United States persons have the authority
          to control all substantial decisions of the trust.
      (31) Foreign estate or trust
        (A) Foreign estate
          The term "foreign estate" means an estate the income of
        which, from sources without the United States which is not
        effectively connected with the conduct of a trade or business
        within the United States, is not includible in gross income
        under subtitle A.
        (B) Foreign trust
          The term "foreign trust" means any trust other than a trust
        described in subparagraph (E) of paragraph (30).
      (32) Cooperative bank
        The term "cooperative bank" means an institution without
      capital stock organized and operated for mutual purposes and
      without profit, which - 
          (A) either - 
            (i) is an insured institution within the meaning of section
          401(a) (!2) of the National Housing Act (12 U.S.C., sec.
          1724(a)), or

            (ii) is subject by law to supervision and examination by
          State or Federal authority having supervision over such
          institutions, and

          (B) meets the requirements of subparagraphs (B) and (C) of
        paragraph (19) of this subsection (relating to definition of
        domestic building and loan association).

      In determining whether an institution meets the requirements
      referred to in subparagraph (B) of this paragraph, any reference
      to an association or to a domestic building and loan association
      contained in paragraph (19) shall be deemed to be a reference to
      such institution.
      (33) Regulated public utility
        The term "regulated public utility" means - 
          (A) A corporation engaged in the furnishing or sale of - 
            (i) electric energy, gas, water, or sewerage disposal
          services, or
            (ii) transportation (not included in subparagraph (C)) on
          an intrastate, suburban, municipal, or interurban electric
          railroad, on an intrastate, municipal, or suburban trackless
          trolley system, or on a municipal or suburban bus system, or
            (iii) transportation (not included in clause (ii)) by motor
          vehicle - 

        if the rates for such furnishing or sale, as the case may be,
        have been established or approved by a State or political
        subdivision thereof, by an agency or instrumentality of the
        United States, by a public service or public utility commission
        or other similar body of the District of Columbia or of any
        State or political subdivision thereof, or by a foreign country
        or an agency or instrumentality or political subdivision
        thereof.
          (B) A corporation engaged as a common carrier in the
        furnishing or sale of transportation of gas by pipe line, if
        subject to the jurisdiction of the Federal Energy Regulatory
        Commission.
          (C) A corporation engaged as a common carrier (i) in the
        furnishing or sale of transportation by railroad, if subject to
        the jurisdiction of the Surface Transportation Board, or (ii)
        in the furnishing or sale of transportation of oil or other
        petroleum products (including shale oil) by pipe line, if
        subject to the jurisdiction of the Federal Energy Regulatory
        Commission or if the rates for such furnishing or sale are
        subject to the jurisdiction of a public service or public
        utility commission or other similar body of the District of
        Columbia or of any State.
          (D) A corporation engaged in the furnishing or sale of
        telephone or telegraph service, if the rates for such
        furnishing or sale meet the requirements of subparagraph (A).
          (E) A corporation engaged in the furnishing or sale of
        transportation as a common carrier by air, subject to the
        jurisdiction of the Secretary of Transportation.
          (F) A corporation engaged in the furnishing or sale of
        transportation by a water carrier subject to jurisdiction under
        subchapter II of chapter 135 of title 49.
          (G) A rail carrier subject to part A of subtitle IV of title
        49, if (i) substantially all of its railroad properties have
        been leased to another such railroad corporation or
        corporations by an agreement or agreements entered into before
        January 1, 1954, (ii) each lease is for a term of more than 20
        years, and (iii) at least 80 percent or more of its gross
        income (computed without regard to dividends and capital gains
        and losses) for the taxable year is derived from such leases
        and from sources described in subparagraphs (A) through (F),
        inclusive. For purposes of the preceding sentence, an agreement
        for lease of railroad properties entered into before January 1,
        1954, shall be considered to be a lease including such term as
        the total number of years of such agreement may, unless sooner
        terminated, be renewed or continued under the terms of the
        agreement, and any such renewal or continuance under such
        agreement shall be considered part of the lease entered into
        before January 1, 1954.
          (H) A common parent corporation which is a common carrier by
        railroad subject to part A of subtitle IV of title 49 if at
        least 80 percent of its gross income (computed without regard
        to capital gains or losses) is derived directly or indirectly
        from sources described in subparagraphs (A) through (F),
        inclusive. For purposes of the preceding sentence, dividends
        and interest, and income from leases described in subparagraph
        (G), received from a regulated public utility shall be
        considered as derived from sources described in subparagraphs
        (A) through (F), inclusive, if the regulated public utility is
        a member of an affiliated group (as defined in section 1504)
        which includes the common parent corporation.

      The term "regulated public utility" does not (except as provided
      in subparagraphs (G) and (H)) include a corporation described in
      subparagraphs (A) through (F), inclusive, unless 80 percent or
      more of its gross income (computed without regard to dividends
      and capital gains and losses) for the taxable year is derived
      from sources described in subparagraphs (A) through (F),
      inclusive. If the taxpayer establishes to the satisfaction of the
      Secretary that (i) its revenue from regulated rates described in
      subparagraph (A) or (D) and its revenue derived from unregulated
      rates are derived from the operation of a single interconnected
      and coordinated system or from the operation of more than one
      such system, and (ii) the unregulated rates have been and are
      substantially as favorable to users and consumers as are the
      regulated rates, then such revenue from such unregulated rates
      shall be considered, for purposes of the preceding sentence, as
      income derived from sources described in subparagraph (A) or (D).
      [(34) Repealed. Pub. L. 98-369, div. A, title IV, Sec.
        4112(b)(11), July 18, 1984, 98 Stat. 792]
      (35) Enrolled actuary
        The term "enrolled actuary" means a person who is enrolled by
      the Joint Board for the Enrollment of Actuaries established under
      subtitle C of the title III of the Employee Retirement Income
      Security Act of 1974.
      (36) Tax return preparer
        (A) In general
          The term "tax return preparer" means any person who prepares
        for compensation, or who employs one or more persons to prepare
        for compensation, any return of tax imposed by this title or
        any claim for refund of tax imposed by this title. For purposes
        of the preceding sentence, the preparation of a substantial
        portion of a return or claim for refund shall be treated as if
        it were the preparation of such return or claim for refund.
        (B) Exceptions
          A person shall not be an (!3) "tax return preparer" merely
        because such person - 

            (i) furnishes typing, reproducing, or other mechanical
          assistance,
            (ii) prepares a return or claim for refund of the employer
          (or of an officer or employee of the employer) by whom he is
          regularly and continuously employed,
            (iii) prepares as a fiduciary a return or claim for refund
          for any person, or
            (iv) prepares a claim for refund for a taxpayer in response
          to any notice of deficiency issued to such taxpayer or in
          response to any waiver of restriction after the commencement
          of an audit of such taxpayer or another taxpayer if a
          determination in such audit of such other taxpayer directly
          or indirectly affects the tax liability of such taxpayer.
      (37) Individual retirement plan
        The term "individual retirement plan" means - 
          (A) an individual retirement account described in section
        408(a), and
          (B) an individual retirement annuity described in section
        408(b).
      (38) Joint return
        The term "joint return" means a single return made jointly
      under section 6013 by a husband and wife.
      (39) Persons residing outside United States
        If any citizen or resident of the United States does not reside
      in (and is not found in) any United States judicial district,
      such citizen or resident shall be treated as residing in the
      District of Columbia for purposes of any provision of this title
      relating to - 
          (A) jurisdiction of courts, or
          (B) enforcement of summons.
      (40) Indian tribal government
        (A) In general
          The term "Indian tribal government" means the governing body
        of any tribe, band, community, village, or group of Indians, or
        (if applicable) Alaska Natives, which is determined by the
        Secretary, after consultation with the Secretary of the
        Interior, to exercise governmental functions.
        (B) Special rule for Alaska Natives
          No determination under subparagraph (A) with respect to
        Alaska Natives shall grant or defer any status or powers other
        than those enumerated in section 7871. Nothing in the Indian
        Tribal Governmental Tax Status Act of 1982, or in the
        amendments made thereby, shall validate or invalidate any claim
        by Alaska Natives of sovereign authority over lands or people.
      (41) TIN
        The term "TIN" means the identifying number assigned to a
      person under section 6109.
      (42) Substituted basis property
        The term "substituted basis property" means property which is -
      
          (A) transferred basis property, or
          (B) exchanged basis property.
      (43) Transferred basis property
        The term "transferred basis property" means property having a
      basis determined under any provision of subtitle A (or under any
      corresponding provision of prior income tax law) providing that
      the basis shall be determined in whole or in part by reference to
      the basis in the hands of the donor, grantor, or other
      transferor.
      (44) Exchanged basis property
        The term "exchanged basis property" means property having a
      basis determined under any provision of subtitle A (or under any
      corresponding provision of prior income tax law) providing that
      the basis shall be determined in whole or in part by reference to
      other property held at any time by the person for whom the basis
      is to be determined.
      (45) Nonrecognition transaction
        The term "nonrecognition transaction" means any disposition of
      property in a transaction in which gain or loss is not recognized
      in whole or in part for purposes of subtitle A.
      (46) Determination of whether there is a collective bargaining
        agreement
        In determining whether there is a collective bargaining
      agreement between employee representatives and 1 or more
      employers, the term "employee representatives" shall not include
      any organization more than one-half of the members of which are
      employees who are owners, officers, or executives of the
      employer. An agreement shall not be treated as a collective
      bargaining agreement unless it is a bona fide agreement between
      bona fide employee representatives and 1 or more employers.
      [(47) Repealed. Pub. L. 111-312, title III, Sec. 301(a), Dec. 17,
        2010, 124 Stat. 3300]
      (48) Off-highway vehicles
        (A) Off-highway transportation vehicles
          (i) In general
            A vehicle shall not be treated as a highway vehicle if such
          vehicle is specially designed for the primary function of
          transporting a particular type of load other than over the
          public highway and because of this special design such
          vehicle's capability to transport a load over the public
          highway is substantially limited or impaired.
          (ii) Determination of vehicle's design
            For purposes of clause (i), a vehicle's design is
          determined solely on the basis of its physical
          characteristics.
          (iii) Determination of substantial limitation or impairment
            For purposes of clause (i), in determining whether
          substantial limitation or impairment exists, account may be
          taken of factors such as the size of the vehicle, whether
          such vehicle is subject to the licensing, safety, and other
          requirements applicable to highway vehicles, and whether such
          vehicle can transport a load at a sustained speed of at least
          25 miles per hour. It is immaterial that a vehicle can
          transport a greater load off the public highway than such
          vehicle is permitted to transport over the public highway.
        (B) Nontransportation trailers and semitrailers
          A trailer or semitrailer shall not be treated as a highway
        vehicle if it is specially designed to function only as an
        enclosed stationary shelter for the carrying on of an off-
        highway function at an off-highway site.
      (49) Qualified blood collector organization
        The term "qualified blood collector organization" means an
      organization which is - 
          (A) described in section 501(c)(3) and exempt from tax under
        section 501(a),
          (B) primarily engaged in the activity of the collection of
        human blood,
          (C) registered with the Secretary for purposes of excise tax
        exemptions, and
          (D) registered by the Food and Drug Administration to collect
        blood.
      (50) Termination of United States citizenship
        (A) In general
          An individual shall not cease to be treated as a United
        States citizen before the date on which the individual's
        citizenship is treated as relinquished under section
        877A(g)(4).
        (B) Dual citizens
          Under regulations prescribed by the Secretary, subparagraph
        (A) shall not apply to an individual who became at birth a
        citizen of the United States and a citizen of another country.
    (b) Definition of resident alien and nonresident alien
      (1) In general
        For purposes of this title (other than subtitle B) - 
        (A) Resident alien
          An alien individual shall be treated as a resident of the
        United States with respect to any calendar year if (and only
        if) such individual meets the requirements of clause (i), (ii),
        or (iii):
          (i) Lawfully admitted for permanent residence
            Such individual is a lawful permanent resident of the
          United States at any time during such calendar year.
          (ii) Substantial presence test
            Such individual meets the substantial presence test of
          paragraph (3).
          (iii) First year election
            Such individual makes the election provided in paragraph
          (4).
        (B) Nonresident alien
          An individual is a nonresident alien if such individual is
        neither a citizen of the United States nor a resident of the
        United States (within the meaning of subparagraph (A)).
      (2) Special rules for first and last year of residency
        (A) First year of residency
          (i) In general
            If an alien individual is a resident of the United States
          under paragraph (1)(A) with respect to any calendar year, but
          was not a resident of the United States at any time during
          the preceding calendar year, such alien individual shall be
          treated as a resident of the United States only for the
          portion of such calendar year which begins on the residency
          starting date.
          (ii) Residency starting date for individuals lawfully
            admitted for permanent residence
            In the case of an individual who is a lawfully permanent
          resident of the United States at any time during the calendar
          year, but does not meet the substantial presence test of
          paragraph (3), the residency starting date shall be the first
          day in such calendar year on which he was present in the
          United States while a lawful permanent resident of the United
          States.
          (iii) Residency starting date for individuals meeting
            substantial presence test
            In the case of an individual who meets the substantial
          presence test of paragraph (3) with respect to any calendar
          year, the residency starting date shall be the first day
          during such calendar year on which the individual is present
          in the United States.
          (iv) Residency starting date for individuals making first
            year election
            In the case of an individual who makes the election
          provided by paragraph (4) with respect to any calendar year,
          the residency starting date shall be the 1st day during such
          calendar year on which the individual is treated as a
          resident of the United States under that paragraph.
        (B) Last year of residency
          An alien individual shall not be treated as a resident of the
        United States during a portion of any calendar year if - 
            (i) such portion is after the last day in such calendar
          year on which the individual was present in the United States
          (or, in the case of an individual described in paragraph
          (1)(A)(i), the last day on which he was so described),
            (ii) during such portion the individual has a closer
          connection to a foreign country than to the United States,
          and
            (iii) the individual is not a resident of the United States
          at any time during the next calendar year.
        (C) Certain nominal presence disregarded
          (i) In general
            For purposes of subparagraphs (A)(iii) and (B), an
          individual shall not be treated as present in the United
          States during any period for which the individual establishes
          that he has a closer connection to a foreign country than to
          the United States.
          (ii) Not more than 10 days disregarded
            Clause (i) shall not apply to more than 10 days on which
          the individual is present in the United States.
      (3) Substantial presence test
        (A) In general
          Except as otherwise provided in this paragraph, an individual
        meets the substantial presence test of this paragraph with
        respect to any calendar year (hereinafter in this subsection
        referred to as the "current year") if - 
            (i) such individual was present in the United States on at
          least 31 days during the calendar year, and
            (ii) the sum of the number of days on which such individual
          was present in the United States during the current year and
          the 2 preceding calendar years (when multiplied by the
          applicable multiplier determined under the following table)
          equals or exceeds 183 days:

              The applicable
    In the case of days in:                               multiplier is:
       Current year                                                 1 
       1st preceding year                                         1/3 
       2nd preceding year                                         1/6 
        (B) Exception where individual is present in the United States
          during less than one-half of current year and closer
          connection to foreign country is established
          An individual shall not be treated as meeting the substantial
        presence test of this paragraph with respect to any current
        year if - 
            (i) such individual is present in the United States on
          fewer than 183 days during the current year, and
            (ii) it is established that for the current year such
          individual has a tax home (as defined in section 911(d)(3)
          without regard to the second sentence thereof) in a foreign
          country and has a closer connection to such foreign country
          than to the United States.
        (C) Subparagraph (B) not to apply in certain cases
          Subparagraph (B) shall not apply to any individual with
        respect to any current year if at any time during such year - 
            (i) such individual had an application for adjustment of
          status pending, or
            (ii) such individual took other steps to apply for status
          as a lawful permanent resident of the United States.
        (D) Exception for exempt individuals or for certain medical
          conditions
          An individual shall not be treated as being present in the
        United States on any day if - 
            (i) such individual is an exempt individual for such day,
          or
            (ii) such individual was unable to leave the United States
          on such day because of a medical condition which arose while
          such individual was present in the United States.
      (4) First-year election
        (A) An alien individual shall be deemed to meet the
      requirements of this subparagraph if such individual - 
          (i) is not a resident of the United States under clause (i)
        or (ii) of paragraph (1)(A) with respect to a calendar year
        (hereinafter referred to as the "election year"),
          (ii) was not a resident of the United States under paragraph
        (1)(A) with respect to the calendar year immediately preceding
        the election year,
          (iii) is a resident of the United States under clause (ii) of
        paragraph (1)(A) with respect to the calendar year immediately
        following the election year, and
          (iv) is both - 
            (I) present in the United States for a period of at least
          31 consecutive days in the election year, and
            (II) present in the United States during the period
          beginning with the first day of such 31-day period and ending
          with the last day of the election year (hereinafter referred
          to as the "testing period") for a number of days equal to or
          exceeding 75 percent of the number of days in the testing
          period (provided that an individual shall be treated for
          purposes of this subclause as present in the United States
          for a number of days during the testing period not exceeding
          5 days in the aggregate, notwithstanding his absence from the
          United States on such days).

        (B) An alien individual who meets the requirements of
      subparagraph (A) shall, if he so elects, be treated as a resident
      of the United States with respect to the election year.
        (C) An alien individual who makes the election provided by
      subparagraph (B) shall be treated as a resident of the United
      States for the portion of the election year which begins on the
      1st day of the earliest testing period during such year with
      respect to which the individual meets the requirements of clause
      (iv) of subparagraph (A).
        (D) The rules of subparagraph (D)(i) of paragraph (3) shall
      apply for purposes of determining an individual's presence in the
      United States under this paragraph.
        (E) An election under subparagraph (B) shall be made on the
      individual's tax return for the election year, provided that such
      election may not be made before the individual has met the
      substantial presence test of paragraph (3) with respect to the
      calendar year immediately following the election year.
        (F) An election once made under subparagraph (B) remains in
      effect for the election year, unless revoked with the consent of
      the Secretary.
      (5) Exempt individual defined
        For purposes of this subsection - 
        (A) In general
          An individual is an exempt individual for any day if, for
        such day, such individual is - 
            (i) a foreign government-related individual,
            (ii) a teacher or trainee,
            (iii) a student, or
            (iv) a professional athlete who is temporarily in the
          United States to compete in a charitable sports event
          described in section 274(l)(1)(B).
        (B) Foreign government-related individual
          The term "foreign government-related individual" means any
        individual temporarily present in the United States by reason
        of - 
            (i) diplomatic status, or a visa which the Secretary (after
          consultation with the Secretary of State) determines
          represents full-time diplomatic or consular status for
          purposes of this subsection,
            (ii) being a full-time employee of an international
          organization, or
            (iii) being a member of the immediate family of an
          individual described in clause (i) or (ii).
        (C) Teacher or trainee
          The term "teacher or trainee" means any individual - 
            (i) who is temporarily present in the United States under
          subparagraph (J) or (Q) of section 101(15) of the Immigration
          and Nationality Act (other than as a student), and
            (ii) who substantially complies with the requirements for
          being so present.
        (D) Student
          The term "student" means any individual - 
            (i) who is temporarily present in the United States - 
              (I) under subparagraph (F) or (M) of section 101(15) of
            the Immigration and Nationality Act, or
              (II) as a student under subparagraph (J) or (Q) of such
            section 101(15), and

            (ii) who substantially complies with the requirements for
          being so present.
        (E) Special rules for teachers, trainees, and students
          (i) Limitation on teachers and trainees
            An individual shall not be treated as an exempt individual
          by reason of clause (ii) of subparagraph (A) for the current
          year if, for any 2 calendar years during the preceding 6
          calendar years, such person was an exempt person under clause
          (ii) or (iii) of subparagraph (A). In the case of an
          individual all of whose compensation is described in section
          872(b)(3), the preceding sentence shall be applied by
          substituting "4 calendar years" for "2 calendar years".
          (ii) Limitation on students
            For any calendar year after the 5th calendar year for which
          an individual was an exempt individual under clause (ii) or
          (iii) of subparagraph (A), such individual shall not be
          treated as an exempt individual by reason of clause (iii) of
          subparagraph (A), unless such individual establishes to the
          satisfaction of the Secretary that such individual does not
          intend to permanently reside in the United States and that
          such individual meets the requirements of subparagraph
          (D)(ii).
      (6) Lawful permanent resident
        For purposes of this subsection, an individual is a lawful
      permanent resident of the United States at any time if - 
          (A) such individual has the status of having been lawfully
        accorded the privilege of residing permanently in the United
        States as an immigrant in accordance with the immigration laws,
        and
          (B) such status has not been revoked (and has not been
        administratively or judicially determined to have been
        abandoned).

      An individual shall cease to be treated as a lawful permanent
      resident of the United States if such individual commences to be
      treated as a resident of a foreign country under the provisions
      of a tax treaty between the United States and the foreign
      country, does not waive the benefits of such treaty applicable to
      residents of the foreign country, and notifies the Secretary of
      the commencement of such treatment.
      (7) Presence in the United States
        For purposes of this subsection - 
        (A) In general
          Except as provided in subparagraph (B), (C), or (D), an
        individual shall be treated as present in the United States on
        any day if such individual is physically present in the United
        States at any time during such day.
        (B) Commuters from Canada or Mexico
          If an individual regularly commutes to employment (or self-
        employment) in the United States from a place of residence in
        Canada or Mexico, such individual shall not be treated as
        present in the United States on any day during which he so
        commutes.
        (C) Transit between 2 foreign points
          If an individual, who is in transit between 2 points outside
        the United States, is physically present in the United States
        for less than 24 hours, such individual shall not be treated as
        present in the United States on any day during such transit.
        (D) Crew members temporarily present
          An individual who is temporarily present in the United States
        on any day as a regular member of the crew of a foreign vessel
        engaged in transportation between the United States and a
        foreign country or a possession of the United States shall not
        be treated as present in the United States on such day unless
        such individual otherwise engages in any trade or business in
        the United States on such day.
      (8) Annual statements
        The Secretary may prescribe regulations under which an
      individual who (but for subparagraph (B) or (D) of paragraph (3))
      would meet the substantial presence test of paragraph (3) is
      required to submit an annual statement setting forth the basis on
      which such individual claims the benefits of subparagraph (B) or
      (D) of paragraph (3), as the case may be.
      (9) Taxable year
        (A) In general
          For purposes of this title, an alien individual who has not
        established a taxable year for any prior period shall be
        treated as having a taxable year which is the calendar year.
        (B) Fiscal year taxpayer
          If - 
            (i) an individual is treated under paragraph (1) as a
          resident of the United States for any calendar year, and
            (ii) after the application of subparagraph (A), such
          individual has a taxable year other than a calendar year,

        he shall be treated as a resident of the United States with
        respect to any portion of a taxable year which is within such
        calendar year.
      (10) Coordination with section 877
        If - 
          (A) an alien individual was treated as a resident of the
        United States during any period which includes at least 3
        consecutive calendar years (hereinafter referred to as the
        "initial residency period"), and
          (B) such individual ceases to be treated as a resident of the
        United States but subsequently becomes a resident of the United
        States before the close of the 3rd calendar year beginning
        after the close of the initial residency period,

      such individual shall be taxable for the period after the close
      of the initial residency period and before the day on which he
      subsequently became a resident of the United States in the manner
      provided in section 877(b). The preceding sentence shall apply
      only if the tax imposed pursuant to section 877(b) exceeds the
      tax which, without regard to this paragraph, is imposed pursuant
      to section 871.
      (11) Regulations
        The Secretary shall prescribe such regulations as may be
      necessary or appropriate to carry out the purposes of this
      subsection.
    (c) Includes and including
      The terms "includes" and "including" when used in a definition
    contained in this title shall not be deemed to exclude other things
    otherwise within the meaning of the term defined.
    (d) Commonwealth of Puerto Rico
      Where not otherwise distinctly expressed or manifestly
    incompatible with the intent thereof, references in this title to
    possessions of the United States shall be treated as also referring
    to the Commonwealth of Puerto Rico.
    (e) Treatment of certain contracts for providing services, etc.
      For purposes of chapter 1 - 
      (1) In general
        A contract which purports to be a service contract shall be
      treated as a lease of property if such contract is properly
      treated as a lease of property, taking into account all relevant
      factors including whether or not - 
          (A) the service recipient is in physical possession of the
        property,
          (B) the service recipient controls the property,
          (C) the service recipient has a significant economic or
        possessory interest in the property,
          (D) the service provider does not bear any risk of
        substantially diminished receipts or substantially increased
        expenditures if there is nonperformance under the contract,
          (E) the service provider does not use the property
        concurrently to provide significant services to entities
        unrelated to the service recipient, and
          (F) the total contract price does not substantially exceed
        the rental value of the property for the contract period.
      (2) Other arrangements
        An arrangement (including a partnership or other pass-thru
      entity) which is not described in paragraph (1) shall be treated
      as a lease if such arrangement is properly treated as a lease,
      taking into account all relevant factors including factors
      similar to those set forth in paragraph (1).
      (3) Special rules for contracts or arrangements involving solid
        waste disposal, energy, and clean water facilities
        (A) In general
          Notwithstanding paragraphs (1) and (2), and except as
        provided in paragraph (4), any contract or arrangement between
        a service provider and a service recipient - 
            (i) with respect to - 
              (I) the operation of a qualified solid waste disposal
            facility,
              (II) the sale to the service recipient of electrical or
            thermal energy produced at a cogeneration or alternative
            energy facility, or
              (III) the operation of a water treatment works facility,
            and

            (ii) which purports to be a service contract,

        shall be treated as a service contract.
        (B) Qualified solid waste disposal facility
          For purposes of subparagraph (A), the term "qualified solid
        waste disposal facility" means any facility if such facility
        provides solid waste disposal services for residents of part or
        all of 1 or more governmental units and substantially all of
        the solid waste processed at such facility is collected from
        the general public.
        (C) Cogeneration facility
          For purposes of subparagraph (A), the term "cogeneration
        facility" means a facility which uses the same energy source
        for the sequential generation of electrical or mechanical power
        in combination with steam, heat, or other forms of useful
        energy.
        (D) Alternative energy facility
          For purposes of subparagraph (A), the term "alternative
        energy facility" means a facility for producing electrical or
        thermal energy if the primary energy source for the facility is
        not oil, natural gas, coal, or nuclear power.
        (E) Water treatment works facility
          For purposes of subparagraph (A), the term "water treatment
        works facility" means any treatment works within the meaning of
        section 212(2) of the Federal Water Pollution Control Act.
      (4) Paragraph (3) not to apply in certain cases
        (A) In general
          Paragraph (3) shall not apply to any qualified solid waste
        disposal facility, cogeneration facility, alternative energy
        facility, or water treatment works facility used under a
        contract or arrangement if - 
            (i) the service recipient (or a related entity) operates
          such facility,
            (ii) the service recipient (or a related entity) bears any
          significant financial burden if there is nonperformance under
          the contract or arrangement (other than for reasons beyond
          the control of the service provider),
            (iii) the service recipient (or a related entity) receives
          any significant financial benefit if the operating costs of
          such facility are less than the standards of performance or
          operation under the contract or arrangement, or
            (iv) the service recipient (or a related entity) has an
          option to purchase, or may be required to purchase, all or a
          part of such facility at a fixed and determinable price
          (other than for fair market value).

        For purposes of this paragraph, the term "related entity" has
        the same meaning as when used in section 168(h).
        (B) Special rules for application of subparagraph (A) with
          respect to certain rights and allocations under the contract
          For purposes of subparagraph (A), there shall not be taken
        into account - 
            (i) any right of a service recipient to inspect any
          facility, to exercise any sovereign power the service
          recipient may possess, or to act in the event of a breach of
          contract by the service provider, or
            (ii) any allocation of any financial burden or benefits in
          the event of any change in any law.
        (C) Special rules for application of subparagraph (A) in the
          case of certain events
          (i) Temporary shut-downs, etc.
            For purposes of clause (ii) of subparagraph (A), there
          shall not be taken into account any temporary shut-down of
          the facility for repairs, maintenance, or capital
          improvements, or any financial burden caused by the
          bankruptcy or similar financial difficulty of the service
          provider.
          (ii) Reduced costs
            For purposes of clause (iii) of subparagraph (A), there
          shall not be taken into account any significant financial
          benefit merely because payments by the service recipient
          under the contract or arrangement are decreased by reason of
          increased production or efficiency or the recovery of energy
          or other products.
      (5) Exception for certain low-income housing
        This subsection shall not apply to any property described in
      clause (i), (ii), (iii), or (iv) of section 1250(a)(1)(B)
      (relating to low-income housing) if - 
          (A) such property is operated by or for an organization
        described in paragraph (3) or (4) of section 501(c), and
          (B) at least 80 percent of the units in such property are
        leased to low-income tenants (within the meaning of section
        167(k)(3)(B)) (as in effect on the day before the date of the
        enactment of the Revenue Reconcilation (!4) Act of 1990).

      (6) Regulations
        The Secretary may prescribe such regulations as may be
      necessary or appropriate to carry out the provisions of this
      subsection.
    (f) Use of related persons or pass-thru entities
      The Secretary shall prescribe such regulations as may be
    necessary or appropriate to prevent the avoidance of those
    provisions of this title which deal with - 
        (1) the linking of borrowing to investment, or
        (2) diminishing risks,

    through the use of related persons, pass-thru entities, or other
    intermediaries.
    (g) Clarification of fair market value in the case of nonrecourse
      indebtedness
      For purposes of subtitle A, in determining the amount of gain or
    loss (or deemed gain or loss) with respect to any property, the
    fair market value of such property shall be treated as being not
    less than the amount of any nonrecourse indebtedness to which such
    property is subject.
    (h) Motor vehicle operating leases
      (1) In general
        For purposes of this title, in the case of a qualified motor
      vehicle operating agreement which contains a terminal rental
      adjustment clause - 
          (A) such agreement shall be treated as a lease if (but for
        such terminal rental adjustment clause) such agreement would be
        treated as a lease under this title, and
          (B) the lessee shall not be treated as the owner of the
        property subject to an agreement during any period such
        agreement is in effect.
      (2) Qualified motor vehicle operating agreement defined
        For purposes of this subsection - 
        (A) In general
          The term "qualified motor vehicle operating agreement" means
        any agreement with respect to a motor vehicle (including a
        trailer) which meets the requirements of subparagraphs (B),
        (C), and (D) of this paragraph.
        (B) Minimum liability of lessor
          An agreement meets the requirements of this subparagraph if
        under such agreement the sum of - 
            (i) the amount the lessor is personally liable to repay,
          and
            (ii) the net fair market value of the lessor's interest in
          any property pledged as security for property subject to the
          agreement,

        equals or exceeds all amounts borrowed to finance the
        acquisition of property subject to the agreement. There shall
        not be taken into account under clause (ii) any property
        pledged which is property subject to the agreement or property
        directly or indirectly financed by indebtedness secured by
        property subject to the agreement.
        (C) Certification by lessee; notice of tax ownership
          An agreement meets the requirements of this subparagraph if
        such agreement contains a separate written statement separately
        signed by the lessee - 
            (i) under which the lessee certifies, under penalty of
          perjury, that it intends that more than 50 percent of the use
          of the property subject to such agreement is to be in a trade
          or business of the lessee, and
            (ii) which clearly and legibly states that the lessee has
          been advised that it will not be treated as the owner of the
          property subject to the agreement for Federal income tax
          purposes.
        (D) Lessor must have no knowledge that certification is false
          An agreement meets the requirements of this subparagraph if
        the lessor does not know that the certification described in
        subparagraph (C)(i) is false.
      (3) Terminal rental adjustment clause defined
        (A) In general
          For purposes of this subsection, the term "terminal rental
        adjustment clause" means a provision of an agreement which
        permits or requires the rental price to be adjusted upward or
        downward by reference to the amount realized by the lessor
        under the agreement upon sale or other disposition of such
        property.
        (B) Special rule for lessee dealers
          The term "terminal rental adjustment clause" also includes a
        provision of an agreement which requires a lessee who is a
        dealer in motor vehicles to purchase the motor vehicle for a
        predetermined price and then resell such vehicle where such
        provision achieves substantially the same results as a
        provision described in subparagraph (A).
    (i) Taxable mortgage pools
      (1) Treated as separate corporations
        A taxable mortgage pool shall be treated as a separate
      corporation which may not be treated as an includible corporation
      with any other corporation for purposes of section 1501.
      (2) Taxable mortgage pool defined
        For purposes of this title - 
        (A) In general
          Except as otherwise provided in this paragraph, a taxable
        mortgage pool is any entity (other than a REMIC) if - 
            (i) substantially all of the assets of such entity consists
          of debt obligations (or interests therein) and more than 50
          percent of such debt obligations (or interests) consists of
          real estate mortgages (or interests therein),
            (ii) such entity is the obligor under debt obligations with
          2 or more maturities, and
            (iii) under the terms of the debt obligations referred to
          in clause (ii) (or underlying arrangement), payments on such
          debt obligations bear a relationship to payments on the debt
          obligations (or interests) referred to in clause (i).
        (B) Portion of entities treated as pools
          Any portion of an entity which meets the definition of
        subparagraph (A) shall be treated as a taxable mortgage pool.
        (C) Exception for domestic building and loan
          Nothing in this subsection shall be construed to treat any
        domestic building and loan association (or portion thereof) as
        a taxable mortgage pool.
        (D) Treatment of certain equity interests
          To the extent provided in regulations, equity interest of
        varying classes which correspond to maturity classes of debt
        shall be treated as debt for purposes of this subsection.
      (3) Treatment of certain REIT's
        If - 
          (A) a real estate investment trust is a taxable mortgage
        pool, or
          (B) a qualified REIT subsidiary (as defined in section
        856(i)(2)) of a real estate investment trust is a taxable
        mortgage pool,

      under regulations prescribed by the Secretary, adjustments
      similar to the adjustments provided in section 860E(d) shall
      apply to the shareholders of such real estate investment trust.
    (j) Tax treatment of Federal Thrift Savings Fund
      (1) In general
        For purposes of this title - 
          (A) the Thrift Savings Fund shall be treated as a trust
        described in section 401(a) which is exempt from taxation under
        section 501(a);
          (B) any contribution to, or distribution from, the Thrift
        Savings Fund shall be treated in the same manner as
        contributions to or distributions from such a trust; and
          (C) subject to section 401(k)(4)(B) and any dollar limitation
        on the application of section 402(e)(3), contributions to the
        Thrift Savings Fund shall not be treated as distributed or made
        available to an employee or Member nor as a contribution made
        to the Fund by an employee or Member merely because the
        employee or Member has, under the provisions of subchapter III
        of chapter 84 of title 5, United States Code, and section 8351
        of such title 5, an election whether the contribution will be
        made to the Thrift Savings Fund or received by the employee or
        Member in cash.
      (2) Nondiscrimination requirements
        Notwithstanding any other provision of law, the Thrift Savings
      Fund is not subject to the nondiscrimination requirements
      applicable to arrangements described in section 401(k) or to
      matching contributions (as described in section 401(m)), so long
      as it meets the requirements of this section.
      (3) Coordination with Social Security Act
        Paragraph (1) shall not be construed to provide that any amount
      of the employee's or Member's basic pay which is contributed to
      the Thrift Savings Fund shall not be included in the term "wages"
      for the purposes of section 209 of the Social Security Act or
      section 3121(a) of this title.
      (4) Definitions
        For purposes of this subsection, the terms "Member",
      "employee", and "Thrift Savings Fund" shall have the same
      respective meanings as when used in subchapter III of chapter 84
      of title 5, United States Code.
      (5) Coordination with other provisions of law
        No provision of law not contained in this title shall apply for
      purposes of determining the treatment under this title of the
      Thrift Savings Fund or any contribution to, or distribution from,
      such Fund.
    (k) Treatment of certain amounts paid to charity
      In the case of any payment which, except for section 501(b) of
    the Ethics in Government Act of 1978, might be made to any officer
    or employee of the Federal Government but which is made instead on
    behalf of such officer or employee to an organization described in
    section 170(c) - 
        (1) such payment shall not be treated as received by such
      officer or employee for all purposes of this title and for all
      purposes of any tax law of a State or political subdivision
      thereof, and
        (2) no deduction shall be allowed under any provision of this
      title (or of any tax law of a State or political subdivision
      thereof) to such officer or employee by reason of having such
      payment made to such organization.

    For purposes of this subsection, a Senator, a Representative in, or
    a Delegate or Resident Commissioner to, the Congress shall be
    treated as an officer or employee of the Federal Government.
    (l) Regulations relating to conduit arrangements
      The Secretary may prescribe regulations recharacterizing any
    multiple-party financing transaction as a transaction directly
    among any 2 or more of such parties where the Secretary determines
    that such recharacterization is appropriate to prevent avoidance of
    any tax imposed by this title.
    (m) Designation of contract markets
      Any designation by the Commodity Futures Trading Commission of a
    contract market which could not have been made under the law in
    effect on the day before the date of the enactment of the Commodity
    Futures Modernization Act of 2000 shall apply for purposes of this
    title except to the extent provided in regulations prescribed by
    the Secretary.
    (n) Convention or association of churches
      For purposes of this title, any organization which is otherwise a
    convention or association of churches shall not fail to so qualify
    merely because the membership of such organization includes
    individuals as well as churches or because individuals have voting
    rights in such organization.
    (o) Clarification of economic substance doctrine
      (1) Application of doctrine
        In the case of any transaction to which the economic substance
      doctrine is relevant, such transaction shall be treated as having
      economic substance only if - 
          (A) the transaction changes in a meaningful way (apart from
        Federal income tax effects) the taxpayer's economic position,
        and
          (B) the taxpayer has a substantial purpose (apart from
        Federal income tax effects) for entering into such transaction.
      (2) Special rule where taxpayer relies on profit potential
        (A) In general
          The potential for profit of a transaction shall be taken into
        account in determining whether the requirements of
        subparagraphs (A) and (B) of paragraph (1) are met with respect
        to the transaction only if the present value of the reasonably
        expected pre-tax profit from the transaction is substantial in
        relation to the present value of the expected net tax benefits
        that would be allowed if the transaction were respected.
        (B) Treatment of fees and foreign taxes
          Fees and other transaction expenses shall be taken into
        account as expenses in determining pre-tax profit under
        subparagraph (A). The Secretary shall issue regulations
        requiring foreign taxes to be treated as expenses in
        determining pre-tax profit in appropriate cases.
      (3) State and local tax benefits
        For purposes of paragraph (1), any State or local income tax
      effect which is related to a Federal income tax effect shall be
      treated in the same manner as a Federal income tax effect.
      (4) Financial accounting benefits
        For purposes of paragraph (1)(B), achieving a financial
      accounting benefit shall not be taken into account as a purpose
      for entering into a transaction if the origin of such financial
      accounting benefit is a reduction of Federal income tax.
      (5) Definitions and special rules
        For purposes of this subsection - 
        (A) Economic substance doctrine
          The term "economic substance doctrine" means the common law
        doctrine under which tax benefits under subtitle A with respect
        to a transaction are not allowable if the transaction does not
        have economic substance or lacks a business purpose.
        (B) Exception for personal transactions of individuals
          In the case of an individual, paragraph (1) shall apply only
        to transactions entered into in connection with a trade or
        business or an activity engaged in for the production of
        income.
        (C) Determination of application of doctrine not affected
          The determination of whether the economic substance doctrine
        is relevant to a transaction shall be made in the same manner
        as if this subsection had never been enacted.
        (D) Transaction
          The term "transaction" includes a series of transactions.
    (p) Cross references
      (1) Other definitions
          For other definitions, see the following sections of Title 1
        of the United States Code:
            (1) Singular as including plural, section 1.
            (2) Plural as including singular, section 1.
            (3) Masculine as including feminine, section 1.
            (4) Officer, section 1.
            (5) Oath as including affirmation, section 1.
            (6) County as including parish, section 2.
            (7) Vessel as including all means of water transportation,
          section 3.
            (8) Vehicle as including all means of land transportation,
          section 4.
            (9) Company or association as including successors and
          assigns, section 5.
      (2) Effect of cross references
          For effect of cross references in this title, see section
        7806(a).