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Treasury Regulations · 26 CFR

§ 1.957-3. United States person defined.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 957

Cite as 26 CFR § 1.957-3

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
April 9, 2008 by T.D. 9391
Issued under
26 U.S.C. § 957
Length
637 words · about 3 min to read
Defines
3 terms
Cross-references
cites 4 Code sections and 5 regulations; cited by 3
(a) Basic rule—
(1) In general. The term United States person has the same meaning for purposes of sections 951 through 965 that it has under section 7701(a)(30) and the regulations under that section, except as provided in paragraphs (b) and (c) of this section, which provide, with respect to corporations organized in possessions of the United States, that certain residents of such possessions are not United States persons. The effect of determining that an individual is not a United States person for such purposes is to exclude such individual in determining whether a foreign corporation created or organized in, or under the laws of, a possession of the United States is a controlled foreign corporation. See § 1.957-1 for the definition of the term “controlled foreign corporation.”
(2) Special provisions applicable to possessions of the United States. For purposes of this section—
(i) The term possession of the United States means Puerto Rico or any section 931 possession;
(ii) The term section 931 possession has the same meaning that it has under § 1.931-1(c)(1);
(iii) The rules of § 1.937-1 will apply for determining whether an individual is a bona fide resident of a possession of the United States;
(iv) Except as provided in paragraph (b)(2) of this section, the rules of § 1.937-2 will apply for determining whether income is from sources within a possession of the United States; and
(v) The rules of § 1.937-3 will apply for determining whether income is effectively connected with the conduct of a trade or business in a possession of the United States.
(b) Puerto Rico corporation and resident. An individual (who, without regard to this paragraph (b), is a United States person) will not be considered a United States person with respect to a foreign corporation created or organized in, or under the laws of, Puerto Rico for the taxable year of such corporation that ends with or within the taxable year of such individual if—
(1) Such individual is a bona fide resident of Puerto Rico during his entire taxable year in which or with which the taxable year of such foreign corporation ends; and
(2) A dividend received by such individual from such corporation during the taxable year of such corporation would, for purposes of section 933(1), be treated as income derived from sources within Puerto Rico. For purposes of this paragraph (b)(2), the rules of § 1.937-2(g)(1) will not apply.
(c) Section 931 possession corporation and resident. An individual (who, without regard to this paragraph (c), is a United States person) will not be considered a United States person with respect to a foreign corporation created or organized in, or under the laws of, a section 931 possession for the taxable year of such corporation that ends with or within the taxable year of such individual if—
(1) Such individual is a bona fide resident of such section 931 possession during his entire taxable year in which or with which the taxable year of such foreign corporation ends; and
(2) Such corporation satisfies the following conditions—
(i) 80 percent or more of its gross income for the 3-year period ending at the close of the taxable year (or for such part of such period as such corporation or any predecessor has been in existence) was derived from sources within section 931 possessions or was effectively connected with the conduct of a trade or business in section 931 possessions; and
(ii) 50 percent or more of its gross income for such period (or part) was derived from the active conduct of a trade or business within section 931 possessions.
(d) Effective/applicability date. This section applies to taxable years ending after April 9, 2008.

[T.D. 9391, 73 FR 19375, Apr. 9, 2008]

Terms defined here

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Other regulations under § 957

Cross-references

Computed from the citations in the text of 26 CFR.

Code sections it cites

Regulations it cites

Cited by 3 other regulations

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Issued by T.D. 9391 (73 FR 19375)

Where it sits in 26 CFR

  1. Subchapter A Income tax
  2. Part 1 Income taxes
  3. Controlled foreign corporations

Nearby sections