@the_good_captain said in Rules Question/Clarification:
My reading of pages 20 + 26 is that if a country’s capital is in enemy hands, and a friendly power controls another factory owned by this country, the friendly power can use the factory and collect IPCs.
Yes.
I was really hoping that if Italy fell to Russia and Russia fell to Japan, that America or Britain could later use the Italian factory. "
No. You cannot capture a territory from a friendly power, whether or not that power has fallen.
If the USSR controls Italy when Moscow falls, it retains control (and cannot use the IC) until Italy is recaptured by the Axis, after which another Allied power could capture it from the Axis (and use the IC). The same applies to Karelia.