Page:United States Statutes at Large Volume 89.djvu/116

 89 STAT. 56

26 USC 904.

PUBLIC LAW 94-12—MAR. 29, 1975 able year ending before January 1, 1976. to any taxable year ending after December 81.1975, if the per-country limitation provided by section 9 0 4 (a)(1) applied to such prior taxable year and to the taxpayer's last taxable year ending before January 1, 1976, then in the case of any foreign oil related carryover— " (A) the first sentence of section 9 0 4 (e)(2) shall not apply, b u t " (B) such amount may not exceed the amount which could have been used in such "succeeding taxable year if the percountry limitation continued to apply. " (f) RECAPTURE OF FOREIGN O I L RELATED L O S S. —

" (1) GENERAL RULE.—For purposes of this subpart, in the case of any taxpayer who sustains a foreign oil related loss for any taxable year— " (A) that portion of the foreign oil related income for each succeeding taxable year which is equal to the lesser of— " (i) the amount of such loss (to the extent not used under this paragraph in prior year s), or " ( i i) 50 percent of the foreign oil related income for such succeeding taxable year, shall be treated as income from sources within the United States (and not as income from sources without the United States), and " (B) the amount of the income, w a r profits, and excess profits taxes paid or accrued (or deemed to have been paid) to a foreign country for such succeeding taxable year with respect to foreign oil related income shall be reduced by an amount which bears the same proportion to the total amount of such foreign taxes as the amount treated as income from sources within the United States under subparagraph (A) bears to the total foreign oil related income for such succeeding taxable year. For purposes of this chapter, the amount of any foreign taxes for which credit is denied under subparagraph (B) of the preceding sentence shall not be allowed as a deduction for any taxable year. For purposes of this subsection, foreign oil related income shall be determined without regard to this subsection. " (2) FOREIGN OIL RELATED LOSS DEFINED.—For purposes of t h i s

26 USC 172. 26 USC 1212.

subsection, the term 'foreign oil related loss' means the amount by which the gross income for the taxable year from sources without the United States and its possessions (whether or not the taxpayer chooses the benefits of this subpart for such taxable year) taken into account in determining the foreign oil related income for such year is exceeded by the sum of the deductions properly apportioned or allocated thereto, except that there shall not be taken into account— " (A) any net operating loss deduction allowable for such year under section 172(a) or any capital loss carrybacks and carryovers to such year under section 1212, and " (B) any— " (i) foreign expropriation loss for such year, as defined in section 172(k)(1), o r " ( i i) loss for such year which arises from fire, storm, shipwreck, or other casualty, or from theft, to the extent such loss is not compensated for by insurance or otherwise. " (3) DISPOSITIONS.—

" (A) IN GENERAL.—For purposes of this chapter, if property used in a trade or business described in subparagraph

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