Sec. 921 Exempt foreign trade income excluded from gross income
(a) Exclusion. Exempt foreign trade income of a FSC shall be treated as foreign source income which is not effectively connected with the conduct of a trade or business within the United States.
(b) Proportionate allocation of deductions to exempt foreign trade income. Any deductions of the FSC properly apportioned and allocated to the foreign trade income derived by a FSC from any transaction shall be allocated between--
(1) the exempt foreign trade income derived from such transaction, and
(2) the foreign trade income (other than exempt foreign trade income) derived from such transaction, on a proportionate basis.
(c) Denial of credits. Notwithstanding any other provision of this chapter, no credit (other than a credit allowable under section 27(a), 33, or 34) shall be allowed under this chapter to any FSC.
(d) Foreign trade income, investment income, and carrying charges treated as effectively connected with United States business. For purposes of this chapter--
(1) all foreign trade income of a FSC other than--
(A) exempt foreign trade income, and
(B) section 923(a)(2) non-exempt income,
(2) all interest, dividends, royalties, and other investment income received or accrued by a FSC, and
(3) all carrying charges received or accrued by a FSC,
shall be treated as income effectively connected with a trade or business conducted through a permanent establishment of such corporation within the United States. Income described in paragraph (1) shall be treated as derived from sources within the United States.
