Collapse to view only § 1351. Treatment of recoveries of foreign expropriation losses
§ 1351. Treatment of recoveries of foreign expropriation losses
(a) Election
(1) In general
(2) Time, manner, and scope
(b) Definition of foreign expropriation loss
(c) Amount of recovery
(1) General rule
(2) Special rule for life insurance companies
(d) Adjustment for prior tax benefits
(1) In general
(2) Computation
(3) Foreign taxes
(4) Substitution of current tax rate
(e) Gain on recovery
(f) Basis of recovered property
(g) Restoration of value of investments
For purposes of this section, if the value of any interest in, or with respect to, property (including any interest represented by a security, as defined in section 165(g)(2))—
(1) which became worthless by reason of the expropriation, intervention, seizure, or similar taking of such property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing, and
(2) which was taken into account as a loss from the sale or exchange of a capital asset or with respect to which a deduction for a loss was allowed under section 165 or a deduction for a bad debt was allowed under section 166,
is restored in whole or in part by reason of any recovery of money or other property in respect of the property which became worthless, the value so restored shall be treated as property received as a recovery in respect of such loss or such bad debt.
(h) Special rule for evidences of indebtedness
(i) Adjustments for succeeding years
For purposes of this subtitle, proper adjustment shall be made, under regulations prescribed by the Secretary, in—
(1) the credit under section 27 (relating to foreign tax credit),
(2) the credit under section 38 (relating to general business credit),
(3) the net operating loss deduction under section 172,
(4) the capital loss carryover under section 1212(a), and
(5) such other items as may be specified by such regulations,
for the taxable year of a recovery of a foreign expropriation loss to which this section applies, and for succeeding taxable years, to take into account items changed in making the computations under subsection (d) for taxable years prior to the taxable year of such recovery.
(Added Pub. L. 89–384, § 1(a), Apr. 8, 1966, 80 Stat. 99; amended Pub. L. 94–455, title X, § 1031(b)(3), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1623, 1834; Pub. L. 95–600, title III, § 301(b)(17), Nov. 6, 1978, 92 Stat. 2823; Pub. L. 98–369, div. A, title I, § 42(a)(12), title II, § 211(b)(18), title IV, § 474(r)(25), July 18, 1984, 98 Stat. 557, 756, 844; Pub. L. 99–514, title XVIII, § 1812(a)(4), Oct. 22, 1986, 100 Stat. 2833; Pub. L. 115–97, title I, § 13511(b)(8), Dec. 22, 2017, 131 Stat. 2142.)