(a) General rule. — In the case of a nonresident alien individual, deductions shall be allowed only for purposes of § 30431(b) of this title and, except as provided in subsection (b), only if, and to the extent that they are connected with income effectively connected with the conduct of trade or business in Puerto Rico. The proper apportionment and allocation of deductions for these purposes shall be determined by rules and regulations prescribed by the Secretary.(b) Exceptions. — The following deductions shall be allowed whether related or not with income effectively connected with the conduct of trade or business within Puerto Rico:(1) Losses. — The deduction allowed by § 30135(a)(2) of this title, for losses not connected with the trade or business if incurred in transactions entered into for profit, shall be allowed whether or not connected with income from sources within Puerto Rico, but only if the profit, if such transaction had resulted in a profit, would have been taxable under this part.(2) Charitable contributions or gifts. — A deduction shall be allowed for contributions as provided by § 30135(a)(3) of this title, whether or not connected with income which is

xable under this part.(2) Charitable contributions or gifts. — A deduction shall be allowed for contributions as provided by § 30135(a)(3) of this title, whether or not connected with income which is effectively connected with the conduct of trade or business within Puerto Rico, but only if such contributions or gifts are made to domestic corporations or to community chests, funds, or foundations created in Puerto Rico (provided that no portion of the net earnings results in the benefit of any private shareholder or individual), or to the special fund for vocational rehabilitation authorized by the Vocational Rehabilitation Act. The amount so allowable, as a whole, shall not exceed fifty percent (50%) of the adjusted gross income which is effectively connected with the conduct of trade or business within Puerto Rico. History —Jan. 31, 2011, No. 1, § 1091.03, retroactive to Jan. 1, 2011.