26 U.S.C. §863(a):

TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter N > PART I > Sec. 863.

Sec. 863. - Special rules for determining source

(a) Allocation under regulations

Items of gross income, expenses, losses, and deductions, other than those specified in sections 861(a) and 862(a), shall be allocated or apportioned to sources within or without the United States, under regulations prescribed by the Secretary. Where items of gross income are separately allocated to sources within the United States, there shall be deducted (for the purpose of computing the taxable income therefrom) the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of other expenses, losses, or other deductions which cannot definitely be allocated to some item or class of gross income. The remainder, if any, shall be included in full as taxable income from sources within the United States.

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Black's Law Dictionary, Sixth Edition, p. 1460:

Under the federal tax law, taxable income is gross income reduced by adjustments and allowable deductions.  It is the income against which tax rates are applied to compute an individual or entity's tax liability.  Essence of "taxable income" is the accrual of some gain, profit or benefit to taxpayer.  In re Goodyear Tire & Rubber Co., Corporate Income Tax 1966, 1967, 1968, 133 Vt. 132, 335 A.2d 310, 313.  See Gross income; Net income.

[Black's Law Dictionary, Sixth Edition, p. 1460]