TRANSITIONAL RULE FOR BOND, ETC., LOSSES OF FOREIGN BANKS.

SEC. 1044. TRANSITIONAL RULE FOR BOND, ETC., LOSSES OF FOREIGN BANKS. (a) General Rule.— Section 5S2(e) (relating to bond. etc., losses and gains of financial institutions) is amended by adding at the end thereof the following new paragraph: “(4) Transitional rule for banks.— In the case of a corporation which would be a bank except for the fact that it is a foreign corporation, the net gain, if any. for the taxable year on safes and exchanges described in paragraph (1) shall be considered as gain from the sale or exchange of a capital asset to the extent such net gain does not exceed the portion of any capital loss carryover to such taxable year which is attributable to capital losses on sales or exchanges described in paragraph (1) for n taxable year beginning before July 12, 1999. For purposes of the preceding sentence, the portion of a net capital loss for a taxable year which is attributable to capital losses on sales or exchanges described in paragraph (1) is the amount of the net capital loss on such sales or exchanges 90 STAT. 1643for such taxable year (but not in excess of the net capital loss for such taxable year).” (b) Effective Date.— (1) The amendment made by subsection (a) shall apply with respect, to taxable, years beginning after July 11, 1969. (2) If the refund or credit of any overpayment attributable to the application of the amendment made by subsection (a) to any taxable year is otherwise prevented by the operation of any law or rule of law (other than section 7122 of the Internal Revenue Code of 1954, relating to compromises) on the day which is one year after the date of the enactment of this Act. such credit or refund shall be nevertheless allowed or made if claim therefor is filed on or before such day.