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TITLE 26-INTERNAL REVENUE CODE income" in such paragraph shall mean "real estate investment trust taxable income" (as defined in section 857(b)(2)). (e) Law applicable to computations In determining the amount of any net operat- ing loss carryback or carryover to any taxable year, the necessary computations involving any other taxable year shall be made under the law applicable to such other taxable year. f) Disallowance of net operating loss of electing small business corporations In determining the amount of the net operat- ing loss deduction under subsection (a) of any corporation, there shall be disregarded the net operating loss of such corporation for any tax- able year for which such corporation is an electing small business corporation under sub- chapter S. (g) Carryover of net operating loss for certain regu- lated transportation corporations (1) Definition For purposes of subsection (b)(1)(C), the term "regulated transportation corporation" means a corporation- (A) 80 percent or more of the gross income of which (computed without regard to dividends and capital gains and losses) for the taxable year is derived from the fur- nishing or sale of transportation described in subparagraph (A), (C)(i), (E), or (F) of section 7701(a)(33) and taken into account for purposes of the limitation contained in the last two sentences of section 7701(a)(33), (B) which is described in subparagraph (G) or (H) of section 7701(a)(33), or (C) which is a member of a regulated transportation system. (2) Regulated transportation system For purposes of this subsection, a corpora- tion shall be treated as a member of a regu- lated transportation system for a taxable year if- (A) it is a member of an affiliated group of corporations making a consolidated return for such taxable year, and (B) 80 percent or more of the aggregate gross income of the members of such affili- ated group (computed without regard to dividends and capital gains and losses) for such taxable year is derived from sources described in paragraph (1)(A). For purposes of subparagraph (B), income de- rived by a corporation described in subpara- graph (G) or (H) of section 7701(a)(33) from leases described in subparagraph (G) thereof shall be considered as derived from sources described in paragraph (1)(A). (3) Limitation For purposes of subsection (b)(1)(C).- (A) a net operating loss may not be a net operating loss carryover to the 6th taxable year following the loss year unless the tax- payer is a regulated transportation corpora- tion for such 6th taxable year; and (B) a net operating loss may not be a net operating loss carryover to the 7th taxable year following the loss year unless the tax- payer is a regulated transportation corpora- tion for the 6th taxable year following the loss year and for such 7th taxable, year. (C) in the case of a net operating loss car- ryover from a loss year ending after Decem- ber 31, 1975. subparagraphs (A) and (B) shall be applied by substituting "8th tax- able year" for the "6th taxable year" and "9th taxable year" for "7th taxable year." (h) Foreign expropriation loss defined For purposes of subsection (b)- (1) The term "foreign expropriation loss" means, for any taxable year, the sum of the losses sustained by reason of the expropri- ation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the forego- ing. For purposes of the preceding sentence, a debt which becomes worthless shall, to the extent of any deduction allowed under sec- tion 166(a), be treated as a loss. (2) The portion of the net operating loss for any taxable year attributable to a foreign ex- propriation loss is the amount of the foreign expropriation loss for such year (but not in excess of the net operating loss for such year). (3) The term "Cuban expropriation loss" means, for any taxable year, a foreign expro- priation loss sustained by reason of the ex- propriation, intervention, seizure, or similar taking of property, before January 1, 1964, by the government of Cuba, any political subdi- vision thereof, or any agency or instrumental- ity of the foregoing. The portion of a foreign expropriation loss for any taxable year attrib- utable to a Cuban expropriation loss is the amount of the Cuban expropriation loss. (1) C:oss references (1) For treatment of net operating loss carryovers in certain corporate acquisitions, see section 381. (2) For special limitation on net operating loss car- ryovers in case of a corporate change of ownership, see section 382. (Aug. 16, 1954, ch. 736, 68A Stat. 63; Sept. 2, 1958, Pub. L. 85-866, title I, §§ 14(a), (b), 64(b), title II, §203(a), (b), 72 Stat. 1611, 1656, 1678; Sept. 27, 1962, Pub. L. 87-710, § 1, 76 Stat. 648; Oct. 10, 1962, Pub. L. 87-792, § 7f), 76 Stat. 829; Oct. 11, 1962, Pub. L. 87-794, title III, § 317(b), 7S Stat. 889; Feb. 26, 1964, Pub. L. 88-272, title II, §§ 210(a), (b), 234(b)(5), 78 Stat. 47, 48, 115; Dec. 27, 1967, Pub. L. 90-225, § 3(a), 81 Stat. 732; Dec. 30, 1969, Pub. L. 91-172, title IV, § 431(b), 83 Stat. 619; Jan. 12, 1971, Pub. L. 91-677, § 2(a)-(c), 84 Stat. 2061; Oct. 4, 1976, Pub. L. 94- 455, title VIII, § 806(a)-(c), title XVI, § 1606(b), (c), title XIX, §§ 1901(a)(29), 1906(b)(13)(A), title XXI, § 2126,.90 Stat. 1598, 1755, 1756, 1769, 1834, 1920.)" AMENDMENT OF SUBSEC. (d) Subsec. (d) of this section amended by Pub. L. 94-455, title X, § 1052(c)(3), (d), Oct. 4, 1976, 90 Stat. 1648, applicable with re- spect to taxable years beginning after Dec. 31, 1979, by striking out paragraph (5) and redesignating paragraph (6) as (5). REFERENCES IN TEXT Provisions of section 317 of the Trade Expansion Act of 1962 relating to application for tax assistance, and Page 175 § 172