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TITLE 26-INTERNAL REVENUE CODE subdivision thereof, or any agency or instru- mentality of the foregoing, 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 or a deduction for a bad debt was allowed under section 166, is restored in whole or in part by reason of any recovery of money or other property in respect of the property which became worthless, the value so restored shall be treated as property received as a recovery in respect of such loss or such bad debt. (h) Special rule for evidences of indebtedness Bonds or other evidences of indebtedness re- ceived as a recovery of a foreign expropriation loss to which this section applies shall not be considered to have any original issue discount within the meaning of section 1232(a)(2). (I) Adjustments for succeeding years For purposes of this subtitle, proper adjust- ment shall be made, under regulations pre- scribed by the Secretary, in- (1) the credit under section 33 (relating to foreign tax credit), (2) the credit under section 38 (relating to investment credit), (3) the net operating loss deduction under section 172, or the operations loss deduction under section 812, (4) the capital loz,. carryover under section 1212(a), and (5) such other items as may be specified by such regulations, for the taxable year of a recovery of a foreign expropriation loss to which this section applies, and for succeeding taxable years, to take into account items changed in making the computa- tions under subsection (d) for taxable years prior to the taxable year of such recovery. (Added Pub. L. 89-384, § l(a), Apr. 8, 1966, 80 Stat. 99, and amended Pub. L. 94-455, title X, § 1031(b)(3), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1623, 1834.) AMENDMENTS 1976-Subsec. (a)(2). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d)(2). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d)(3). Pub. L. 94-455, § 1031(b)(3), struck out provisions relating to an election to have the limi- tation provided by section 904(a)(2) apply and to the revocation of such an election previously made. Subsec. (I). Pub. L. 94-455. § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". EFFECTivE DATE OF 1976 AMENDmENT Amendment of subsec. (d)(3) by section 1031(b)(3) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1975, with exceptions for certain mining operations, and for income from possessions, see sec- tion 1031(c) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 904 of this title. EFFECTIVE DATE Section 2 of Pub L. 89-384 provided that: "The amendments made by section 1 (except subsection (b)) [adding this section and section 6167 of this title and amending sections 46, 901, 6503, and 6601 of this title] shall apply with respect to amounts received after De- cember 31, 1964, in respect of foreign expropriation losses (as defined in section 1351(b) of the Internal Revenue Code of 1954 added by section 1(a)) [subsec. (b) of this section] sustained after December 31, 1958." SECTION REFERRED TO IN OTKm SECTIONS This section is referred to in sections 46, 80, 901, 936, 6167 of this title. [§ 1361. Repealed. Pub. L. 89-389,. § 4(b)(1), Apr. 14, 1966, 80 Stat. 116] Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 350; Oct. 10, 1962, Pub. L. 87-792, § 7(h), 76 Stat. 829; Feb. 26, 1964, Pub. L. 88-272, title II, § 225(k)(5), 78 Stat. 94; Apr. 14, 1966, Pub. L. 89-389, § 4(a), 80 Stat. 115, relat- ed to election of unincorporated business enterprises to be treated as domestic corporations, and provided for general rule, qualifications, applicability of corpo- rate provisions, limitation, irrevocability of elections, change of ownership, constructive ownership, imposi- tion of taxes, personal holding company income, com- putation of taxable income, distributions other than in liquidation and in liquidation, and revocation and termination of elections. Er'xcrv: DATE or REP.L Section 4(b)(1) of Pub. L. 89-389 provided for repeal of provisions effective Jan. 1, 1969. Sutchapter S-Election of Certain Small Business Corporations as to Taxable Status Se. 1371. 1372. 1373. 1374. 1375. 1376. 1377. 1378. 1379. Definitions, Election by small business corporation. Corporation undistributed taxable income taxed to shareholders. Corporation net operating loss allowed to share- holders. Special rules applicable to distributions of elect- ing small business corporations, Adjustment to basis of stock of, and indebted- ness owing, shareholders. Special rules applicable to earnings and profits of electing srpall business corporations. Tax imposed on certain capital gains. Certain qualified pensions, etc., plans. AMENDMENTS 1969-Pub. L. 91-172, title V. § 531(c). Dec. 30, 1969. 83 Stat. 656, added Item 1379. 1966-Pub. L. 89-389, § 2(b)(1), Apr. 14, 1966, 80 Stat. 114, added item 1378. 1958-Pub. L. 85-866, title I, § 64(a), Sept. 2, 1958, 72 Stat. 1640, added subchapter S. SuscHAP'rx REFSRRM TO IN OTHRz SECTIONS This subchapter is referred to in sections 46, 48, 50A, BOB, 172, 1212, 6037, 6103 of this title. § 1371, Definitions (a) Small business corporation For purposes of this subchapter, the term "small business corporation" means a domestic corporation which is not a member of an affili- ated group (as defined in section 1504) and which does not- (1) have (except as provided in subsection (e)) more than 10 shareholders; (2) have as a shareholder a person (other than an estate and other than a trust de- scribed in subsection (f)) who is not an indi- vidual; (3) have a nonresident alien as a share- holder; and (4) have more than one class of stock. § 1361 Page 730