Qualified Possession Source Investment Income Law and Legal Definition

The term qualified possession source investment income means gross income derived from sources that are in the possession of the U.S., in which a trade or business is actively conducted. A qualified possession source investment income established by a taxpayer to the satisfaction of the secretary is attributable to the investment of funds that is derived from the active conduct of a trade or business in such possession, or from such investment, less the deductions properly apportioned or allocated thereto [26 USCS § 936(d)(2)].