Definition:
Transportation income includes income derived from the use or lease of a vessel or aircraft or from the performance of personal services directly related to the use of a vessel or aircraft. Income from transportation that both begins and ends within the United States is treated as U.S. source income. If the transportation begins in the United States and ends abroad (or visa versa), then 50 percent of the income is treated as U.S. source income and the other 50 percent as foreign source income. This rule does not apply to transportation income derived from the performance of personal services performed by a taxpayer. See Page 21