Grecian Magnesite Mining, Indus. & Shipping Co. v. Comm'r of Internal Revenue Service

Srinivasan, Circuit Judge:

Grecian Magnesite Mining, a foreign corporation, realized substantial income when it redeemed its interest in a U.S. partnership. At the time, Grecian operated entirely outside the United States, save for its interest in the partnership. The question we face is whether the geographic origin of the redemption income-its "source"-is within or without the United States.

Under the Internal Revenue Code's general rule, the income would be sourced according to the residence of the taxpayer. But that general rule is subject to an exception known as the U.S. office rule.…