SEC. 4. ELECTION TO EXCLUDE

CERTAIN GROSS RECEIPTS FROM FOREIGN TRADING GROSS RECEIPT

A taxpayer may elect to exclude gross receipts from its “foreign trading gross receipts” in any taxable year under

§ 942(a)(3). A taxpayer makes a § 942 (a)(3) election on a transaction-by-transaction basis. A taxpayer makes such election by checking the box on line 1 in Part I of Form 8873 and attaching the completed form to its income tax return. In the case of a partnership, each partner may make this election with respect to any transaction for which the partnership maintains separate accounts. A taxpayer that excludes some, but not all, of its gross receipts from foreign trading gross receipts must attach to its Form 8873 a tabular schedule that identifies the gross receipts that are excluded from foreign trading gross receipts.