
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC80]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
          PART II--ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME
 
Sec. 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--
        (1) Except as provided in paragraph (2), the amount included in 
    gross income under this section shall be treated as ordinary income.
        (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 provisions

    This section shall not apply to any recovery of a foreign 
expropriation loss to which section 1351 applies.

(Added Pub. L. 89-384, Sec. 1(b)(1), Apr. 8, 1966, 80 Stat. 101; amended 
Pub. L. 94-455, title XIX, Secs. 1901(b)(3)(K), 1906(b)(13)(A), Oct. 4, 
1976, 90 Stat. 1793, 1834; Pub. L. 98-369, div. A, title II, 
Sec. 211(b)(2), July 18, 1984, 98 Stat. 754.)


                               Amendments

    1984--Subsec. (a). Pub. L. 98-369 substituted ``801'' for ``802''.
    1976--Subsec. (b). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out 
``or his delegate'' after ``Secretary''.
    Subsec. (c)(1). Pub. L. 94-455, Sec. 1901(b)(3)(K), substituted 
``ordinary income'' for ``gain from the sale or exchange of property 
which is neither a capital asset nor property described in section 
1231''.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable to taxable years beginning 
after Dec. 31, 1983, see section 215 of Pub. L. 98-369, set out as an 
Effective Date note under section 801 of this title.


                    Effective Date of 1976 Amendment

    Amendment by section 1901(b)(3)(K) of Pub. L. 94-455 applicable with 
respect to taxable years beginning after Dec. 31, 1976, see section 
1901(d) of Pub. L. 94-455, set out as a note under section 2 of this 
title.


                             Effective Date

    Section 1(b)(3) of Pub. L. 89-384, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendments 
made by this subsection [enacting this section] 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 1986 
[formerly I.R.C. 1954] (as added by paragraph (1) of this subsection) 
which were sustained after December 31, 1958.''
