§ 582. Bad debts, losses, and gains with respect to securities held by financial institutions
(c)
Bond, etc., losses and gains of financial institutions
(1)
General rule
For purposes of this subtitle, in the case of a financial institution referred to in paragraph (2), the sale or exchange of a bond, debenture, note, or certificate or other evidence of indebtedness shall not be considered a sale or exchange of a capital asset. For purposes of the preceding sentence, any regular or residual interest in a REMIC shall be treated as an evidence of indebtedness.
(2)
Financial institutions to which paragraph (1) applies
(A)
In general
For purposes of paragraph (1), the financial institutions referred to in this paragraph are—
(i)
any bank (and any corporation which would be a bank except for the fact it is a foreign corporation),
(B)
Business development corporation
For purposes of subparagraph (A), the term “business development corporation” means a corporation which was created by or pursuant to an act of a State legislature for purposes of promoting, maintaining, and assisting the economy and industry within such State on a regional or statewide basis by making loans to be used in trades and businesses which would generally not be made by banks within such region or State in the ordinary course of their business (except on the basis of a partial participation), and which is operated primarily for such purposes.