US Code

Public Law 119-73 (01/23/2026)

26 U.S.C. § 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.

Pub. L. 89–384, § 1(b)(1)80 Stat. 101Pub. L. 94–455, title XIX90 Stat. 1793Pub. L. 98–369, div. A, title II, § 211(b)(2)98 Stat. 754(Added , , ; amended , §§ 1901(b)(3)(K), 1906(b)(13)(A), , , 1834; , , .)

Editorial Notes

Amendments

Pub. L. 98–3691984—Subsec. (a). substituted “801” for “802”.

Pub. L. 94–455, § 1906(b)(13)(A)1976—Subsec. (b). , struck out “or his delegate” after “Secretary”.

Pub. L. 94–455, § 1901(b)(3)(K)Subsec. (c)(1). , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.

Statutory Notes and Related Subsidiaries

Effective Date of 1984 Amendment

Pub. L. 98–369section 215 of Pub. L. 98–369section 801 of this titleAmendment by applicable to taxable years beginning after , see , set out as an Effective Date note under .

Effective Date of 1976 Amendment

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

Effective Date

Pub. L. 89–384, § 1(b)(3)80 Stat. 102Pub. L. 99–514, § 2100 Stat. 2095

“The amendments made by this subsection [enacting this section] shall apply to taxable years beginning after , 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 .”
, , , as amended by , , , provided that: