LOSSES ARISING FROM EXPROPRIATION OF PROPERTY BY GOVERNMENTS OF FOREIGN COUNTRIES.

SEC. 210. LOSSES ARISING FROM EXPROPRIATION OF PROPERTY BY GOVERNMENTS OF FOREIGN COUNTRIES. (a) Net Operating Loss Carryover.—Section 172 (relating to net operating loss deduction) is amended— (1) by striking out “Except as provided in clause (ii)” in subsection (b)(1)(A)(i) and inserting in lieu thereof “Except as provided in clause (ii) and in subparagraph (D)”; (2) by striking out “Except as provided in subparagraph (C)” in subsection (b)(1)(B) and inserting in lieu thereof “Except its provided in subparagraphs (C) and (D)”; (3) by adding at the end of subsection (b)(1) the following new subparagraph: “(D) In the case of a taxpayer which has a foreign expropriation loss (as defined in subsection (k)) for any taxable year ending after December 31, 1958, the portion of the net operating loss for such year attributable to such foreign ex-78 Stat. 48propriation loss shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss and shall be a net operating loss carryover to each of the 10 taxable years following the taxable year of such loss.”; (4) by adding at the end of subsection (b) (3) the following new subparagraphs: “(C) Paragraph (1) (D) shall apply only if— “(i) the foreign expropriation loss (as defined in subsection (k)) for the taxable year equals or exceeds 50 percent of the net operating loss for the taxable year, “(ii) in the case of a foreign expropriation loss for a taxable year ending after December 31, 1963, the taxpayer elects (at such time and in such manner as the Secretary or his delegate by regulations prescribes) to have paragraph (1)(D) apply, and “(iii) in the case of a foreign expropriation loss for a taxable year ending after December 31, 1958, and before January 1, 1964, the taxpayer elects (in such manner as the Secretary or his delegate by regulations prescribes) on or before December 31, 1965, to have paragraph (1)(D) apply. “(D) If a taxpayer makes an election under subparagraph (C) (iii), then (notwithstanding any law or rule of law), with respect to any taxable year ending before January 1, 1964, affected by the election— “(i) the time for making or changing any choice or election under subpart A of part III of subchapter N (relating to foreign tax credit) shall not expire before January 1, 1966, “(ii) any deficiency attributable to the election under subparagraph (C)(iii) or to the application of clause (i) of this subparagraph may be assessed at any time before January 1, 1969, and “(iii) refund or credit of any overpayment attributable to the election under subparagraph (C)(iii) or to the application of clause (i) of this subparagraph may be made or allowed if claim therefor is filed before January 1, 1969.”; (5) by redesignating subsection (k) as (1), and by inserting after subsection (j) the following new subsection: “(k) Foreign Expropriations Loss Defined.—For purposes of subsection (b)— “(1) The term ‘foreign expropriation loss’ means, for any taxable year, the sum of the losses sustained by reason of the expropriation intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing. For purposes of the preceding sentence, a debt which becomes worthless shall, to the extent of any deduction allowed under section 166(a), be treated as a loss. “(2) The portion of the net operating loss for any taxable year attributable to a foreign expropriation loss is the amount of the foreign expropriation loss for such year (but not in excess of the net. operating loss for such year).” (b) Technical Amendments.—Section 172(b) (2) is amended— (1) by striking out subparagraph (B) and inserting in lieu thereof the following: “(B) by determining the amount of the net operating loss deduction— 78 Stat. 49 “(i) without regard to the net operating loss for the loss year or for any taxable year thereafter, and “(ii) without regard to that portion, if any, of a pet operating loss for a taxable year attributable to a foreign expropriation loss, if such portion may not, under paragraph (1) (D), be carried back to such prior taxable year,”; and (2) by adding at the end thereof the following new sentence: “For purposes of this paragraph, if a portion of the net operating loss for the loss year is attributable to a foreign expropriation loss to which paragraph (1) (D) applies, such portion shall be considered to be a separate net operating loss for such year to be applied after the other portion of such net operating loss.” (c) Effective Date.—The amendments made by this section shall apply in respect of foreign expropriation losses (as defined in section 172(k) of the Internal Revenue Code of 1954, as amended by subsection (a)(5) of this section), sustained in taxable years ending after December 31, 1958.