The gross profit from a sale of inventory manufactured in the United States and soldby a U.S. retailer to a customer in Spain will always be treated as 100 percent U.S. source income.

Question

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The gross profit from a sale of inventory manufactured in the United States and sold by a U.S. retailer to a customer in Spain is treated as 100 percent U.S. source income because the sale is considered to have occurred in the United States. This is because the retailer is considered to have a permanent establishment in the United States, and the sale is therefore considered to have been made through that permanent establishment.

The Gross Profit from a Sale of Inventory Manufactured in the United