§1353 — Title 26 Internal Revenue Code | U.S. Code

Summary

An electing corporation figures its notional shipping income by adding an amount for each qualifying vessel it runs. For each vessel, multiply the daily notional shipping income by the number of days that vessel worked in United States foreign trade during the tax year. If some of a vessel’s income is excluded from gross income under section 883 or similar rules, reduce the vessel’s notional amount by the same fraction that taxable U.S. foreign‑trade income is of the vessel’s total income. Daily notional shipping income is 40 cents for each 100 tons of net tonnage up to 25,000 tons, and 20 cents for each 100 tons above 25,000. If two or more parties operate the same vessel at the same time, split the notional income among them based on their ownership, charter, and operating agreement shares, or other rules the Secretary sets.

Title 26, §1353

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of this subchapter, the notional shipping income of an electing corporation shall be the sum of the amounts determined under subsection (b) for each qualifying vessel operated by such electing corporation.

(b)(1)For purposes of subsection (a), the amount of notional shipping income of an electing corporation for each qualifying vessel for the taxable year shall equal the product of—

(A)the daily notional shipping income, and

(B)the number of days during the taxable year that the electing corporation operated such vessel as a qualifying vessel in United States foreign trade.

(2)In the case of a qualifying vessel any of the income from which is not included in gross income by reason of section 883 or otherwise, the amount of notional shipping income from such vessel for the taxable year shall be the amount which bears the same ratio to such shipping income (determined without regard to this paragraph) as the gross income from the operation of such vessel in the United States foreign trade bears to the sum of such gross income and the income so excluded.

(c)For purposes of subsection (b), the daily notional shipping income from the operation of a qualifying vessel is—

(1)40 cents for each 100 tons of so much of the net tonnage of the vessel as does not exceed 25,000 net tons, and

(2)20 cents for each 100 tons of so much of the net tonnage of the vessel as exceeds 25,000 net tons.

(d)If for any period 2 or more persons are operators of a qualifying vessel, the notional shipping income from the operation of such vessel for such period shall be allocated among such persons on the basis of their respective ownership, charter, and operating agreement interests in such vessel or on such other basis as the Secretary may prescribe by regulations.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2005—Subsec. (d). Pub. L. 109–135 substituted “ownership, charter, and operating agreement interests” for “ownership and charter interests”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.

Effective Date

Section applicable to taxable years beginning after Oct. 22, 2004, see section 248(c) of Pub. L. 108–357, set out as an

Effective Date

of 2004

Amendments

note under section 56 of this title.

§1353 Notional shipping income

Summary

Title 26, §1353

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Amendments

Citations & Metadata