### Question
How does the law define allocable interest?


### Answer
Under *26 U.S.C. § 884*, **allocable interest** is defined as:

> any interest which is allocable to income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States

#### Citation:
  - *26 U.S.C. § 884*
  - 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 II-NONRESIDENT ALIENS AND FOREIGN CORPORATIONS > Subpart B-Foreign Corporations**

