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Title 46 — ShippingRelease 119-73not60

§53507 Nontaxation of Deposits

Title 46 › Subtitle Subtitle V— Merchant Marine › Part C— Financial Assistance Programs › Chapter 535— CAPITAL CONSTRUCTION FUNDS › § 53507

Last updated Apr 5, 2026|Official source

Summary

Reduce your federal taxable income under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) by the amount you deposit into the fund from the sources listed in section 53505(a)(1). If you sell something covered by section 53505(a)(3) and put the net proceeds (as the joint regulations define) into the fund, the gain from that sale won’t count as taxable income. Investment earnings of the fund aren’t taxed, a corporation’s earnings and profits are figured without counting the fund, and amounts in the fund are ignored for the tax under section 531. These tax rules apply only if the deposit is made on time under the joint regulations.

Full Legal Text

Title 46, §53507

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(a)Subject to subsection (b), under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.)—
(1)taxable income (determined without regard to this chapter and section 7518 of such Code (26 U.S.C. 7518)) for the taxable year shall be reduced by the amount deposited for the taxable year out of amounts referred to in section 53505(a)(1) of this title;
(2)a gain from a transaction referred to in section 53505(a)(3) of this title shall not be taken into account if an amount equal to the net proceeds (as defined in joint regulations) from the transaction is deposited in the fund;
(3)the earnings (including gains and losses) from the investment and reinvestment of amounts held in the fund shall not be taken into account;
(4)the earnings and profits of a corporation (within the meaning of section 316 of such Code (26 U.S.C. 316)) shall be determined without regard to this chapter and section 7518 of such Code (26 U.S.C. 7518); and
(5)in applying the tax imposed by section 531 of such Code (26 U.S.C. 531), amounts held in the fund shall not be taken into account.
(b)This section applies to an amount only if the amount is deposited in the fund under the agreement within the time provided in joint regulations.

Legislative History

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 5350746 App.:1177(d).June 29, 1936, ch. 858, title VI, § 607(d), 49 Stat. 2005; June 23, 1938, ch. 600, §§ 23–28, 52 Stat. 960; Aug. 4, 1939, ch. 417, § 10, 53 Stat. 1185; July 17, 1952, ch. 939, §§ 17–19, 66 Stat. 764; Pub. L. 85–637, Aug. 14, 1958, 72 Stat. 216; Pub. L. 86–518, § 1, June 12, 1960, 74 Stat. 216; Pub. L. 87–45, § 6, May 27, 1961, 75 Stat. 91; Pub. L. 87–271, Sept. 21, 1961, 75 Stat. 570; restated Pub. L. 91–469, § 21(a), Oct. 21, 1970, 84 Stat. 1028; Pub. L. 99–514, title II, § 261(e)(1), (2), Oct. 22, 1986, 100 Stat. 2215.

Reference

Citations & Metadata

Citation

46 U.S.C. § 53507

Title 46 — Shipping

Last Updated

Apr 5, 2026

Release point: 119-73not60