This bill aims to stimulate economic recovery in U.S. possessions by amending the Internal Revenue Code's residence and income sourcing rules. It modifies the definition of a bona fide resident for territories like Puerto Rico and the U.S. Virgin Islands, requiring individuals to be present for at least 122 days in the possession during the taxable year and removing certain exceptions to this rule. The legislation also revises how income is sourced and determined to be effectively connected with a trade or business within these possessions. Specifically, it clarifies that income from sources outside the United States is only U.S. source income if tied to a U.S. office, and it prevents income from preparatory or auxiliary activities in the U.S. from being treated as U.S. source income. These changes, effective for taxable years beginning after December 31, 2024, are intended to provide tax clarity and incentives for economic development in the territories.