102
PUBLIC LAW 89-384-APR. 8, 1966
[80 STAT.
which such security was related, the value so restored (to the extent that, when added to the value so restored during prior taxable years, it does not exceed the amount of the loss described in paragraph (2)) shall, except as provided in subsection (b), be included in gross income for the taxable year in which such restoration occurs. "(b)
REDUCTION FOR FAILURE TO RECEIVE TAX BENEFIT.—The
amount otherwise includible in gross income under subsection (a) in respect of any security shall be reduced by an amount equal to the amount (if any) of the loss described in subsection (a)(2) which did not result in a reduction of the taxpayer's tax under this subtitle for any taxable year, determined under regulations prescribed by the Secretary or his delegate. "(c) CHARACTER OF INCOME.—For purposes of this subtitle— " (1) Except as provided in paragraph (2), the amount included in gross income under this section shall be treated as gain from the sale or exchange of property which is neither a capital asset 68A Stat. 325. yiov property described in section 1231. "(2) If the loss described in subsection (a)(2) was taken into account as a loss from the sale or exchange of a capital asset, the amount included in gross income under this section shall be treated as long-term capital gain. " (d) TREATMENT UNDER FOREIGN EXPROPRIATION Loss RECOVERY PROVISION.—This section shall not apply to any recovery of a foreign Ante, p. 99. expropriation loss to which section 1351 applies." (2) The table of sections for such part II is amended by adding at the end thereof the following: "Sec. 80. Restoration of value of certain securities."
rslta^'ia^"'
(3) The amendments made by this subsection shall apply to taxable years beginning after December 31, 1965, but only with respect to losses described in section 80(a)(2) of the Internal Revenue Code of 1954 (as added by paragraph (1) of this subsection) which were sustained after December 31 1958. (c)(1) Section'46(a)"(3) of the Internal Revenue Code of 1954 (relating to liability for tax for purposes of the investment credit) is amended by inserting after "personal holding company tax) " the lollowing: ", and any additional tax imposed for the taxable year by section 1351(d)(1) (relating to recoveries of foreign expropriation losses),". (2) Section 901(a) of such Code (relating to foreign tax credit) is amended by inserting after "section 1333 (relating to war loss recoveries)" in the last sentence thereof "or under section 1351 (relating to recoveries of foreign expropriation losses)". (d) Subchapter B of chapter 62 of the Internal Revenue Code of 1954 (relating to time and place for paying tax) is amended by adding at the end thereof the following new section: "SEC. 6167. EXTENSION OF TIME FOR PAYMENT OF TAX ATTRIBUTABLE TO RECOVERY OF FOREIGN EXPROPRIATION LOSSES. "(a)
EXTENSION ALLOWED BY ELECTION,—If—
"(1) a corporation has a recovery of a foreign expropriation loss to which section 1351 applies, and "(2) the portion of the recovery received in money is less than 25 percent of the amount of such recovery (as defined in section 1351(c)) and is not greater than the tax attributable to such recovery, the tax attributable to such recovery shall, at the election of the taxpayer, be payable in 10 equal installments on the 15th day of the third month of each of the taxable years following the taxable year of the
�
