@coachdcj Player 2 is correct. From the Official Rules Clarifications document (page 4):
You can never give an ally anything: units, territories or I.P.C.'s.
Germany just catpures Moscow, and collected IPCs from Russia.
On the very next turn, Russia captures Berlin.
What happens to Germany’s IPCs, and the IPCs Germany just captured from Russia? Can Russia collect them and spend them when and if Moscow is liberated, or do they simply disappear?
Welcome, Febo!
The Soviets get the IPCs, but they can’t spend them until Moscow is liberated. Captured IPCs are not “income”, so it’s OK to collect them even if your capital is in enemy hands.