Page:United States Statutes at Large Volume 96 Part 1.djvu/491

 PUBLIC LAW 97-248—SEPT. 3, 1982

96 STAT. 449

"(II) the sum of the deductions properly apportioned or allocated thereto. "(ii) NET OPERATING LOSS DEDUCTION NOT TAKEN INTO

ACCOUNT.—For purposes of clause (i), the net operating loss deduction allowable for the taxable year under section 172(a) shall not be taken into account. "(iii) EXPROPRIATION AND CASUALTY LOSSES NOT TAKEN INTO ACCOUNT.—For purposes of clause (i), there shall not be taken into account— "(I) any foreign expropriation loss (as defined in section 172(h)) for the taxable year, or "(II) any loss for the taxable 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."

26 USC 172.

(b) EXTRACTION INCOME REMOVED FROM FOREIGN OIL RELATED

INCOME.—Paragraph (2) of section 907(c) (defining foreign oil related income) is amended to read as follows: "(2) FOREIGN OIL RELATED INCOME.—The term 'foreign oil related income' means the taxable income derived from sources outside the United States and its possessions from— "(A) the processing of minerals extracted (by the taxpayer or by any other person) from oil or gas wells into their primary products, "(B) the transportation of such minerals or primary products, "(C) the distribution or sale of such minerals or primary products, "(D) the disposition of assets used by the taxpayer in the trade or business described in subparagraph (A), (B), or (C), or "(E) the performance of any other related service."

26 USC 907.

(c) REPEAL OF SEPARATE APPLICATION OF SECTION 904 TO FOREIGN OIL RELATED INCOME; AMOUNTS TREATED AS FOREIGN TAXES ON SUCH INCOME.—

(1) IN GENERAL.—Subsection (b) of section 907 (relating to special rules in case of foreign oil and gas income) is amended to read as follows: "(b) FOREIGN TAXES ON FOREIGN OIL RELATED INCOME.—For purposes of this subtitle, in the csise of taxes paid or accrued to any foreign country with respect to foreign oil related income, the term 'income, war profits, and excess profits taxes' shall not include any amount paid or accrued after December 31, 1982, to the extent that the Secretary determines that the foreign law imposing such amount of tax is structured, or in fact operates, so that the amount of tax imposed with respect to foreign oil related income will generally be materially greater, over a reasonable period of time, than the amount generally imposed on income that is neither foreign oil related income nor foreign oil and gas extraction income. In computing the amount not treated as tax under this subsection, such amount shall be treated as a deduction under the foreign law." (2) REPEAL OF SEPARATE TREATMENT OF FOREIGN OIL RELATED

LOSS.—Subsection (f) of section 904 (relating to recapture of overall foreign loss) is amended by striking out paragraph (4) and redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.

26 USC 904.

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