46 U.S.C. § 53508: Separate accounts within a…

Summary

Requires a capital construction fund to have three separate accounts: a capital account, a capital gain account, and an ordinary income account. The capital account holds certain capital contributions and gains, the percentage of dividends set by Internal Revenue Code section 243(a)(1) (except amounts excluded by another rule), and tax‑exempt interest under IRC section 103. The capital gain account holds net long‑term capital gains (assets held more than 6 months). The ordinary income account holds net short‑term gains and losses (6 months or less), taxable interest and other ordinary income, and any dividend portion not in the capital account. Losses can only offset gains in the same account unless the fund is ended.

Title 46, §53508

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(a)In General.—

A capital construction fund shall have three accounts:

(1)The capital account.

(2)The capital gain account.

(3)The ordinary income account.

(b)Capital Account.—

The capital account shall consist of

(1)

(2)amounts referred to in section 53505(a)(3) of this title, except that portion representing a gain not taken into account because of section 53507(a)(2) of this title;

(3)the percentage applicable under section 243(a)(1) of the Internal Revenue Code of 1986 (26 U.S.C. 243(a)(1)) of any dividend received by the fund for which the person maintaining the fund would be allowed (were it not for section 53507(a)(3) of this title) a deduction under section 243 of such Code (26 U.S.C. 243); and

(4)interest income exempt from taxation under section 103 of such Code (26 U.S.C. 103).

(c)Capital Gain Account.—

The capital gain account shall consist of— (1)

(2)amounts representing capital losses on assets held in the fund for more than 6 months.

(d)Ordinary Income Account.—

The ordinary income account shall consist of— (1)

(2)(A)amounts representing capital gains on assets held for not more than 6 months and referred to in section 53505(a)(3) or (4) of this title; minus

(B)amounts representing capital losses on assets held in the fund for not more than 6 months;

(3)interest (except tax-exempt interest referred to in subsection (b)(4)) and other ordinary income (except any dividend referred to in paragraph (5)) received on assets held in the fund;

(4)ordinary income from a transaction described in section 53505(a)(3) of this title; and

(5)that portion of any dividend referred to in subsection (b)(3) not taken into account under subsection (b)(3).

(e)When Losses Allowed.—

Except on termination of a fund, capital losses referred to in subsection (c) or (d)(2) shall be allowed only as an offset to gains referred to in subsection (c) or (d)(2), respectively.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 5350846 App.:1177(e).June 29, 1936, ch. 858, title VI, § 607(e), 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)(3), (4), Oct. 22, 1986, 100 Stat. 2215.

§53508 Separate Accounts Within a Fund

Summary

Title 46, §53508

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata