### Question
How does the law define foreign base company income?


### Answer
Under *26 U.S.C. § 954*, **foreign base company income** is defined as:

> for any taxable year the sum of—


(1) the foreign personal holding company income for the taxable year (determined under subsection (c) and reduced as provided in subsection (b)(5)),


(2) the foreign base company sales income for the taxable year (determined under subsection (d) and reduced as provided in subsection (b)(5)), and


(3) the foreign base company services income for the taxable year (determined under subsection (e) and reduced as provided in subsection (b)(5))

#### Citation:
  - *26 U.S.C. § 954*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart F-Controlled Foreign Corporations**

