foreign corporation which are part of the management and operational functions of the corporation, and (3) which make a substantial contribution to the production of such item of income. (f) Qualified trade or business For purposes of this section— (1) In general The term qualified trade or business means any trade or business which consists of— (A) manufacturing, producing, growing, or extracting property outside of the United States, or (B) providing services outside of the United States. (2) Special rule for substantial contributions to manufacturing and services If a trade or business consists of making a substantial contribution through the activities of the officers and employees of the controlled foreign corporation to a qualified trade or business which is described in subparagraph (A) or (B) of paragraph (1) of another person, then the trade or business shall be treated as a qualified trade or business described in subparagraph (A) or (B) of paragraph (1), whichever is applicable. 954. Definition of passive income (a) Passive income (1) In general For purposes of this part, the term passive income means the portion of the gross income which consists of: (A) Dividends, etc Dividends, interest, royalties, rents, and annuities. (B) Certain property transactions The excess of gains over losses from the sale or exchange of property— (i) which gives rise to income described in subparagraph (A) (after application of paragraph (2)(A)) other than property which gives rise to income not treated as passive income by reason of subsection (c) or (d) for the taxable year, (ii) which is an interest in a trust, partnership, or REMIC, or (iii) which does not give rise to any income. Gains and losses from the sale or exchange of any property which, in the hands of the controlled foreign corporation, is property described in section 1221(a)(1) shall not be taken into account under this subparagraph. (C) Commodities transactions The excess of gains over losses from transactions (including futures, forward, and similar