Title II — TAX ON INCOME such loss which exceeds the taxable income of such first year shall be deducted in like manner from the taxable income of the next remaining four (4) years. (4) Capital Losses. — (a) Limitation. — Losses from sales or exchanges of capital assets shall be allowed only to the extent provided in Section 39. (b) Securities Becoming Worthless. — If securities as defined in Section 22(T) become worthless during the taxable year and are capital assets, the loss resulting therefrom shall, for purposes of this Title, be considered as a loss from the sale or exchange, on the last day of such taxable year, of capital assets. (5) Losses From Wash Sales of Stock or Securities. — Losses from ‘wash sales’ of stock or securities as provided in Section 38. (6) Wagering Losses. — Losses from wagering transactions shall be allowed only to the extent of the gains from such transactions. (7) Abandonment Losses. — (a) In the event a contract area where petroleum operations are undertaken is partially or wholly abandoned, all accumulated exploration and development expenditures pertaining thereto shall be allowed as a deduction: Provided, That accumulated expenditures incurred in that area prior to January 1, 1979 shall be allowed as a deduction only from any income derived from the same contract area. In all cases, notices of abandonment shall be filed with the Commissioner. (b) In case a producing well is subsequently abandoned, the unamortized costs thereof, as well as the undepreciated costs of equipment directly used therein, shall be allowed as a deduction in the year such well, equipment or facility is abandoned by the contractor: Provided, That if such abandoned well is reentered and production is resumed, or if such equipment or facility is restored into service, the said costs shall be included as part of gross income in the year of resumption or restoration and shall be amortized or depreciated, as the case may be. (E) Bad Debts. — (1) In General. — Debts due to the taxpayer actually ascertained to be worthless and charged off within the taxable year except those not connected with profession, trade or business and those sustained in a transaction entered into between parties mentioned under Section National Internal Revenue Code of 1997 (as amended by the TRAIN Law, RAs 11256, 11346 and 11467) 51