Possession Income Taxes Law and Legal Definition

Possession income taxes means any tax of a possession of the U.S. that are not treated as income, war profits, or excess profits taxes paid or accrued to a possession of the U.S.

Possession income taxes is not treated as income, war profits, or excess profits taxes because, pursuant to 26 USCS § 936, any tax of a foreign country or a possession of the U.S. which is paid or accrued with respect to taxable income that is taken into account in computing the credit cannot be treated as income, war profits, or excess profits taxes paid or accrued to a foreign country or possession of the U.S. Further, possession income taxes should not be taken into account for any taxable year to the extent that the amount of such taxes exceeds nine percent of the amount of the taxable income for such taxable year.