§ 80. Restoration of value of certain securities
(a)
General rule
In the case of a domestic corporation subject to the tax imposed by section
11 or
801, if the value of any security (as defined in section
165
(g)(2))—
(1)
which became worthless by reason of the expropriation, intervention, seizure, or similar taking by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing of property to which such security was related, 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,
is restored in whole or in part during any taxable year by reason of any recovery of money or other property in respect of the property to 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.
(c)
Character of income
For purposes of this subtitle—
(d)
Treatment under foreign expropriation loss recovery provisions
This section shall not apply to any recovery of a foreign expropriation loss to which section
1351 applies.