year or where the taxpayer acquires, or disposes of, the major portion of a trade or business or the major portion of a separate unit of a trade or business during the taxable year. (c) Qualified medical and drug manufacturing income For purposes of this section— (1) In general The term qualified medical and drug manufacturing income for any taxable year means an amount equal to the excess (if any) of— (A) the taxpayer’s domestic medical and drug manufacturing gross receipts for the taxable year, over (B) the sum of— (i) the cost of goods sold that are allocable to such receipts, and (ii) other expenses, losses, or deductions which are properly allocable to such receipts. (2) Allocation method The Secretary shall prescribe rules for the proper allocation of items described in paragraph (1)(B) for purposes of determining qualified medical and drug manufacturing income. Such rules shall provide for the proper allocation of items whether or not such items are directly allocable to domestic medical and drug manufacturing gross receipts. (3) Special rules for determining costs (A) In general For purposes of determining costs under clause (i) of paragraph (1)(B), any item or service brought into the United States shall be treated as acquired by purchase, and its cost shall be treated as not less than its value immediately after it entered the United States. (B) Exports for further manufacture In the case of any property described in subparagraph (A) that had been exported by the taxpayer for further manufacture, the increase in cost or adjusted basis under subparagraph (A) shall not exceed the difference between the value of the property when exported and the value of the property when brought back into the United States after the further manufacture. (4) Domestic medical and drug manufacturing gross receipts (A) In general The term domestic medical and drug manufacturing gross receipts means the gross receipts of the taxpayer which are derived from any sale, exchange, or other disposition of— (i) any active