§ 873. Deductions

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1954

   Aug. 16, 1954, ch. 736, 68A Stat. 280 · 68A Stat. 280

   Enacted · 26 U.S.C. § 873

   Aug. 16, 1954, ch. 736, 68A Stat. 280

   Source evidence

   Code source credit
   Aug. 16, 1954, ch. 736, 68A Stat. 280

2. 1966

   Foreign Investors Tax Act of 1966

   Pub. L. 89–809 title I § 103(c)(1) · 80 Stat. 1539

   1. Amended · 26 U.S.C. § 873

      Pub. L. 89–809 amended section generally

   2. Substituted · 26 U.S.C. § 873

      Pub. L. 89–809 substituting “connected with income which is effectively connected with the conduct of a trade or business within the United States” for “connected with income from sources within the United States” in subsec. (a)

   3. Struck · 26 U.S.C. § 873

      Pub. L. 89–809 striking out provisions relating to the deduction of losses not connected with a trade or business but incurred in transactions entered into for profit in subsec. (b), making the casualty loss deduction available even if the property giving rise to the loss is not effectively connected with the conduct of a trade or business in the United States if the property is located in this country, making the charitable contribution deduction available even though not related to the trade or business

   4. Added · 26 U.S.C. § 873

      Pub. L. 89–809 adding subsec. (c)(2) making a cross reference to section 906(b)(1) for rule that certain foreign taxes are not to be taken into account in determining deduction or credit

   Source evidence

   Code amendment note
   Pub. L. 89–809 amended section generally, substituting “connected with income which is effectively connected with the conduct of a trade or business within the United States” for “connected with income from sources within the United States” in subsec. (a), striking out provisions relating to the deduction of losses not connected with a trade or business but incurred in transactions entered into for profit in subsec. (b), making the casualty loss deduction available even if the property giving rise to the loss is not effectively connected with the conduct of a trade or business in the United States if the property is located in this country, making the charitable contribution deduction available even though not related to the trade or business, and adding subsec. (c)(2) making a cross reference to section 906(b)(1) for rule that certain foreign taxes are not to be taken into account in determining deduction or credit.

   Enacted provision · exact public law section
   (1) Section 873 (relating to deductions allowed to nonresident alien individuals) is amended to read as follows: “SEC. 873. DEDUCTIONS. “(a) General Rule.— In the case of a nonresident alien individual, the deductions shall be allowed only for purposes of section 871 (b) and (except as provided by subsection (b) ) only if and to the extent that they are connected with income which is effectively connected with the conduct of a trade or business within the United States; and the proper apportionment and allocation of the deductions for this purpose shall be determined as provided in regulations prescribed by the Secretary or his delegate. “(b) Exceptions.— The following deductions shall be allowed whether or not they are connected with income which is effectively connected with the conduct of a trade or business within the United States: “(1) Losses.— The deduction, for losses of property not connected with the trade or business if arising from certain casualties 78 Stat. 43. or theft, allowed by section 165(c)(3), but only if the loss is of property located within the United States. “(2) Charitable contributions.— The deduction for charitable contributions and gifts allowed by section 170. “(3) Personal exemption.— The deduction for personal exemptions allowed by section 151, except that in the case of a nonresident alien individual who is not a resident of a contiguous country only one exemption shall be allowed under section 151. “(c) Cross References.— “(1) For disallowance of standard deduction, see section 142(b)(1). “(2) For rule that certain foreign taxes are not to be taken into account in determining deduction or credit, see section 906(b)(1).”

3. 1972

   Pub. L. 92–580 § 1(b) · 86 Stat. 1276

   Substituted · 26 U.S.C. § 873(b)(3)

   Pub. L. 92–580 substituted exception that only one exemption be allowed under section 151 unless the taxpayer is a resident of a contiguous country or is a national of the United States, for exception that in the case of a non-resident alien individual who is not a resident of a contiguous country only one exception be allowed under section 151

   Source evidence

   Code amendment note
   Subsec. (b)(3). Pub. L. 92–580 substituted exception that only one exemption be allowed under section 151 unless the taxpayer is a resident of a contiguous country or is a national of the United States, for exception that in the case of a non-resident alien individual who is not a resident of a contiguous country only one exception be allowed under section 151.

4. 1976

   Pub. L. 94–455 title XIX § 1906(b)(13)(A) · 90 Stat. 1520

   Struck · 26 U.S.C. § 873(a)

   Pub. L. 94–455 struck out “or his delegate” after “Secretary”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.

   Enacted provision · exact public law section
   (A) The Internal Revenue Code of 1954, as amended by this Act, is amended by striking out “Secretary or his delegate” each place it appears and inserting in lieu thereof “Secretary”.

5. 1977

   Tax Reduction and Simplification Act of 1977

   Pub. L. 95–30 title I § 101(d)(11) · 91 Stat. 126

   1. Struck · 26 U.S.C. § 873(c)

      Pub. L. 95–30 struck out par. (1) which made a cross reference to section 142(b)(1) for disallowance of the standard deduction

   2. Struck · 26 U.S.C. § 873(c)

      Pub. L. 95–30 struck out “(2)” at beginning of single remaining cross reference

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 95–30 struck out par. (1) which made a cross reference to section 142(b)(1) for disallowance of the standard deduction and struck out “(2)” at beginning of single remaining cross reference.

   Enacted provision · exact public law section
   (11) Subsection (c) of section 873 (relating to deductions in the case of nonresident alien individuals) is amended to read as follows: “(c) Cross Reference.— “For rule that certain foreign taxes are not to be taken into account in determining deduction or credit, see section 906(b)(1).”

6. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 div. A title VII § 711(c)(2)(A)(iv) · 98 Stat. 494

   Substituted · 26 U.S.C. § 873(b)(1)

   Pub. L. 98–369 substituted “for losses” for “, for losses of property not connected with the trade or business if arising from certain casualties or theft,”

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 98–369 substituted “for losses” for “, for losses of property not connected with the trade or business if arising from certain casualties or theft,”.

   Enacted provision · exact public law section
   (iv) Sections 873(b)(1) and 931(d)(2)(B) are each 26 USC 873, 931. amended by striking out “, for losses of property not connected with the trade or business if arising from certain casualties or theft,” and inserting in lieu thereof “for losses”.

7. 1998

   Pub. L. 105–277 div. J title IV § 4004(b)(3) · 112 Stat. 2681

   Amended · 26 U.S.C. § 873(b)(1)

   Pub. L. 105–277 amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The deduction for losses allowed by section 165(c)(3), but only if the loss is of property located within the United States.”

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 105–277 amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The deduction for losses allowed by section 165(c)(3), but only if the loss is of property located within the United States.”

   Enacted provision · exact public law section
   (3) Paragraph (1) of section 873(b) is amended to read as follows: “(1) Losses.— The deduction allowed by section 165 for casualty or theft losses described in paragraph (2) or (3) of section 165(c), but only if the loss is of property located within the United States.”

   Effective date note
   Amendment by Pub. L. 105–277 applicable to taxable years beginning after Dec. 31, 1983, see section 4004(c)(1) of Pub. L. 105–277, set out as a note under section 172 of this title.

9 of 11 references resolved to an enrolled provision · 2 partial