Definition Definition

Possessions Corporation

Possessions Corporation refers to a U.S. corporation, the subsidiary of another U.S. corporation, which for tax purposes is treated as if it were a foreign corporation.

To qualify as a possessions corporation, a corporation must satisfy the following requirements:

  1. It is a domestic U.S. corporation.
  2. At least 80% of its gross income is derived from within a U.S. possession.
  3. At least 75% of its gross income is derived from the active conduct of a trade or business in a U.S possession.
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