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TITLE 26-INTERNAL REVENUE CODE Subsec. (b). Pub. L. 88-272, § 207(a), added subsec. (b), and omitted a prior subsec. (b) which denied the deduction for certain Federal income taxes, for Feder- al war profits and excess profits taxes, import duties, excise and stamp taxes, and estate, inheritance, legacy, succession and gift taxes, local assessments against benefits increasing property values, and cer. tain taxes imposed by any foreign country or posses- sion of the United States if the taxpayer chose to benefit by sectiov 901 relating to foreign tax credit, and for taxes on real property to the extent that they are treated as impos~d on another taxpayer. Subsec. (c). Pub. L. e8-272, § 207(a), substituted pro- visions denying the leduction for taxes assessed against local benefits -hich increase property value, except for so much as L, properly allocable to mainte- nance or interest charge: and for real property taxes to the extent they are ti, %ted as imposed on another taxpayer, for provisions relating to certain retail sales taxes and gasoline taxes, the extent to which they were deductible, and to the definition of "state or local sales tax". Subsec. (M). Pub. L. 88-272, § 207(b)(1), inserted "State" preceding "real property taxes". Subsec. (g). Pub. L. 88-272, § 207(b)(2), designated existing provisions as par. (1), substituted "1451" for '1451(f)" therein, and added par. (2). 1958-Subsec. f). Pub. L. 85-866. § 6(a), added subsec. (f) and redesignated former subsec. (f) as (g). Subsec. (g). Pub. L. 85-866, § 6(a), redesignated former subsec. f) as (g). EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsecs. (a)(25) and (b)(3)(A) by Pub. L. 94-455 applicable with respect to taxable years be- ginning after Dec. 31, 1976, see sections 1901(d) and 1951(d) of Pub. L. 94-455, set out as Effective Date of 1976 Amendment notes under sections 2 and 72 of this title, respectively. EFFECTIVE DATE OF 1972 AMENDMENT Section 4(b) of Pub. L. 92-580 provided that: "The amendment made by subsection (a) [adding subpar. (E) to subsec. (b)(2) of this section] shall apply to tax- able years ending on or after January 1. 1971." EFFECTIVE DATE OF 964 AMENDMENT Section 207(c) of Pub. L. 88-272 provided that: "I() General rule.-Except as provided in paragraph (2), the amendments made by this section [adding sec- tion 275, and amending this section, and sections 535, 545(b)(1), 556(b)(1), 901 and 903 of this title] shall apply to taxable years beginning after December 31, 1963. "(2) Special taxing districts.-Section 164(c)(1) of the Internal Revenue Code of 1954 (as amended by subsection (a)) shall not prevent the deduction under section 164 of such Code (as so amended) of taxes levied by a special taxing district which is described in section 164(b)(5) of such Code (as in effect for a tax- able year ending on December 31, 1963) and which was in existence on December 31, 1963, for the purpose of retiring indebtedness existing on such date." EFFECTIVE DATE OF 1958 AMENDMENT Section 6(b) of Pub. L. 85-866 provided that: "The amendments made by subsection (a) [to subsecs. f) and (g) of this section] shall apply with respect to tax- able years beginning after December 31, 1957." SAVINGS PROVISION Section 1951(b)(3)(B) of Pub. L. 94-455 provided that: "Notwithstanding subparagraph (A) (repealing subsec. (f) of this section], any amount paid or accrued in a taxable year beginning after December 31, 1976, to the Atomic Energy Commission or its successors for municipal-type services shall be allowed as a deduction under section 164 (this section] if such amount would have been deductible by reason of section 164(f) [subscc. (f) of this section] (as in effect for a taxable year ending on December 31, 1976) and if the amount is paid or accrued with respect to real property n a community (within the meaning of section 21(b) of the Atomic Energy Community Act of 1955 (42 U.S.C. 2304(b))) in which the Commission on December 31, 1976, was rendering municipal-type services for which it received compensation from the owners of property within such community." CROSS REFERENCES Carrying charges not deductible, see section 266 of this title. Federal employment taxes not deductible, see sec- tion 3502 of this title. Nondeductibility of employment taxes in computing taxable income, see section 3502 of this title. Taxable year deduction to be taken, see section 461 of this title. Withholding tax not deductible by employer or em- ployee, see section 3502 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 57, 163, 216, 275, 542, 556, 691, 703, 804, 822, 832, 853, 901, 903, 905, 960, 1001, 1012, 6362 of this title; title 31 ( ,tion 1228, § 165. Losses (a) General rule There shall be allowed as a deduction any loss sustained during the taxable year and not com- pensated for by insurance or otherwise. (b) Amount of deduction For purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property. (c) Limitation on losses of individuals In the case of an individual, the deduction under subsection (a) shall be limited to- (1) losses incurred in a trade or business; (2) losses incurred in any transaction en- tered into for profit, though not connected with a trade or business; and (3) losses of property not connected with a trade or business, if such losses arise from fire, storm, shipwreck, or other casualty, or from theft. A loss described in this paragraph shall be allowed only to the extent that the amount of loss to such individual arising from each casualty, or from each theft, exceeds $100. For purposes of the $100 limitation of the preceding sentence, a husband and wife making a joint return under section 6013 for the taxable year in which the loss is allowed as a deduction shall be treated as one individ- ual. No loss described in this paragraph shall be allowed if, at the time of filing the return, such loss has been claimed for estate tax pur- poses in the estate tax return. (d) Wagering losses Losses from wagering transactions shall be al- lowed only to the extent of the gains from such transactions. (e) Theft losses For purposes of subsection (a), any loss aris- ing from theft shall be treated as sustained during the taxable year in which the taxpayer discovers such loss. Page 147 § 165