qualified items of income, gain, deduction, and loss
(A)The term “qualified items of income, gain, deduction, and loss” means items of income, gain, deduction, and loss to the extent such items are— (i)effectively connected with the conduct of a trade or business within the United States (within the meaning of section 864(c), determined by substituting “qualified trade or business (within the meaning of)” for “nonresident alien individual or a foreign corporation” or for “a 1foreign corporation” each place it appears), and (ii)included or allowed in determining taxable income for the taxable year. (B)The following items shall not be taken into account as a qualified item of income, gain, deduction, or loss: (i)Any item of short-term capital gain, short-term capital loss, long-term capital gain, or long-term capital loss. (ii)Any dividend, income equivalent to a dividend, or payment in lieu of dividends described inAny amount described in section 1385(a)(1) shall not be treated as described in this clause. (iii)Any interest income other than interest income which is properly allocable to a trade or business. (iv)Any item of gain or loss described in subparagraph (C) or (D) of(applied by substituting “qualified trade or business” for “controlled foreign corporation”). (v)Any item of income, gain, deduction, or loss taken into account under(determined without regard to clause (ii) thereof and other than items attributable to notional principal contracts entered into in transactions qualifying under section 1221(a)(7)). (vi)Any amount received from an annuity which is not received in connection with the trade or business. (vii)Any item of deduction or loss properly allocable to an amount described in any of the preceding clauses.