(a) Extension allowed by election
If—
(1) a corporation has a recovery of a foreign expropriation loss to which section 1351 applies, and
(2) the portion of the recovery received in money is less than 25 percent of the amount of such recovery (as defined in section 1351(c)) and is not greater than the tax attributable to such recovery,
the tax attributable to such recovery shall, at the election of the taxpayer, be payable in 10 equal installments on the 15th day of the fourth month of each of the taxable years following the taxable year of the recovery. Such election shall be made at such time and in such manner as the Secretary may prescribe by regulations. If an election is made under this subsection, the provisions of this subtitle shall apply as though the Secretary were extending the time for payment of such tax.
(b) Extension permitted by Secretary
If a corporation has a recovery of a foreign expropriation loss to which section 1351 applies and if an election is not made under subsection (a), the Secretary may, upon finding that the payment of the tax attributable to such recovery at the time otherwise provided in this subtitle would result in undue hardship, extend the time for payment of such tax for a reasonable period or periods not in excess of 9 years from the date on which such tax is otherwise payable.
(c) Acceleration of payments
If—
(1) an election is made under subsection (a),
(2) during any taxable year before the tax attributable to such recovery is paid in full—
(A) any property (other than money) received on such recovery is sold or exchanged, or
(B) any property (other than money) received on any sale or exchange described in subparagraph (A) is sold or exchanged, and
(3) the amount of money received on such sale or exchange (reduced by the amount of the tax imposed under chapter 1 with respect to such sale or exchange), when added to the amount of money—
(A) received on such recovery, and
(B) received on previous sales or exchanges described in subparagraphs (A) and (B) of paragraph (2) (as so reduced),
exceeds the amount of money which may be received under subsection (a)(2),
an amount of the tax attributable to such recovery equal to such excess shall be payable on the 15th day of the fourth month of the taxable year following the taxable year in which such sale or exchange occurs. The amount of such tax so paid shall be treated, for purposes of this section, as a payment of the first unpaid installment or installments (or portion thereof) which become payable under subsection (a) following such taxable year.
(d) Proration of deficiency to installments
If an election is made under subsection (a), and a deficiency attributable to the recovery of a foreign expropriation loss has been assessed, the deficiency shall be prorated to such installments. The part of the deficiency so prorated to any installment the date for payment of which has not arrived shall be collected at the same time as, and as part of, such installment. The part of the deficiency so prorated to any installment the date for payment of which has arrived shall be paid upon notice and demand from the Secretary. This subsection shall not apply if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax.
(e) Time for payment of interest
If the time for payment for any amount of tax has been extended under this section, interest payable under section 6601 on any unpaid portion of such amount shall be paid annually at the same time as, and as part of, each installment payment of the tax. Interest, on that part of a deficiency prorated under this section to any installment the date for payment of which has not arrived, for the period before the date fixed for the last installment preceding the assessment of the deficiency, shall be paid upon notice and demand from the Secretary.
(f) Tax attributable to recovery of foreign expropriation loss
For purposes of this section, the tax attributable to a recovery of a foreign expropriation loss is the sum of—
(1) the additional tax imposed by section 1351(d)(1) on such recovery, and
(2) the amount by which the tax imposed under subtitle A is increased by reason of the gain on such recovery which under section 1351(e) is considered as gain on the involuntary conversion of property.
(g) Failure to pay installment
If any installment under this section is not paid on or before the date fixed for its payment by this section (including any extension of time for the payment of such installment), the unpaid portion of the tax payable in installments shall be paid upon notice and demand from the Secretary.
(h) Cross-references
(1) Security.—For authority of the Secretary to require security in the case of an extension under this section, see section 6165.
(2) Period of limitation.—For extension of the period of limitation in the case of an extension under this section, see section 6503(e).
Amendments
2015—Subsecs. (a), (c). Pub. L. 114–41 substituted "fourth month" for "third month" in concluding provisions.
1976—Subsecs. (a), (b), (d), (e), (g). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".
Subsec. (h). Pub. L. 94–455, §§1902(b)(2)(B), 1906(b)(13)(A), substituted "section 6503(e)" for "section 6503(f)", and struck out "or his delegate" after "Secretary".
1975—Subsec. (e). Pub. L. 93–625, §7(d)(2), struck out provision that in applying section 6601(j) (relating to the application of the 4-percent interest rate in the case of recoveries of foreign expropriation losses to which this section applies) in the case of a deficiency, the entire amount which was prorated to installments under this section shall be treated as an amount of tax the payment of which was extended under this section.
Subsec. (h). Pub. L. 93–625, §7(d)(3), struck out par. (1) providing a cross reference for payment of interest at 4 percent per annum for period of an extension under section 6601(j) of this title, and redesignated pars. (2) and (3) as (1) and (2), respectively.
Effective Date of 2015 Amendment
Amendment by Pub. L. 114–41 applicable to returns for taxable years beginning after Dec. 31, 2015, with special rule for certain C corporations, see section 2006(a)(3) of Pub. L. 114–41, set out as a note under section 170 of this title.
Effective Date of 1976 Amendment
Amendment by section 1902(b)(2)(B) of Pub. L. 94–455 applicable to estates of decedents dying after Oct. 4, 1976, see section 1902(c)(1) of Pub. L. 94–455, set out as a note under section 2012 of this title.
Effective Date of 1975 Amendment
Amendment by Pub. L. 93–625 effective July 1, 1975, and applicable to amounts outstanding on such date or arising thereafter, see section 7(e) of Pub. L. 93–625, set out as an Effective Date note under section 6621 of this title.
Effective Date
Section applicable with respect to amounts received after Dec. 31, 1964, in respect of foreign expropriation losses (as defined in section 1351(b) of this title) sustained after Dec. 31, 1958, see section 2 of Pub. L. 89–384, set out as a note under section 1351 of this title.
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