Separate limitation
(2) Separate limitation defined. For purposes of paragraph (c)(1) of this section and these regulations, the term separate limitation means any of the separate limitations under former section 904(d)(1)(A) (passive interest limitation), (B) (DISC dividend limitation), (C) (foreign trade income limitation), (D) (FSC distributions limitation), and (E) (general limitation) and the separate limitation under section 907(b) (FORI limitation) (for taxable years ending after December 31, 1975, and beginning before January 1, 1983). (3) Method of allocation and apportionment of deductions. In determining its overall foreign loss, a taxpayer shall allocate and apportion expenses, losses, and other deductions to the appropriate category of gross income in accordance with section 862(b) and 1.861-8 of the regulations. However, the following deductions shall not be taken into account: (i) The amount of any net operating loss deduction for such year under section 172(a); and (ii) To the extent such losses are not compensated for by insurance or otherwise, the amount of any (A) Expropriation losses for such year (as defined in section 172(h)), or (B) Losses for such year which arise from fire, storm, shipwreck, or other casualty, or from theft.