46 U.S.C. § 53508 — Separate accounts within a fund
submitted 20 years ago by Pub. L. 109-304 to r/title-46-SHIPPING · 372 words · no verdicts yet
A capital construction fund keeps three separate accounts: capital, capital gain, and ordinary income. Each account collects specific kinds of deposits, gains, and income, as listed. Except at termination, losses in the capital gain or ordinary income account can only offset gains in that same account.
(a) In General. A capital construction fund must have three accounts: (1) the capital account; (2) the capital gain account; and (3) the ordinary income account.
(b) Capital Account. The capital account holds: (1) depreciation-deduction deposits under section 53505(a)(2); (2) sale, insurance, or indemnity proceeds under section 53505(a)(3), except the part representing a gain not counted because of section 53507(a)(2); (3) the percentage (set by tax code section 243(a)(1)) of any dividend the fund receives, if the fund holder would otherwise get a deduction under tax code section 243; and (4) tax-exempt interest income under tax code section 103.
(c) Capital Gain Account. The capital gain account holds capital gains on assets held over 6 months (from section 53505(a)(3) or (4)), minus capital losses on assets held over 6 months.
(d) Ordinary Income Account. The ordinary income account holds: (1) income deposits under section 53505(a)(1); (2) capital gains minus capital losses on assets held 6 months or less; (3) interest (other than tax-exempt interest) and other ordinary income on fund assets, except dividends counted under (b)(3); (4) ordinary income from a section 53505(a)(3) transaction; and (5) the part of a dividend under (b)(3) not already counted there.
(e) When Losses Allowed. Except when the fund terminates, capital losses in (c) or (d)(2) can only offset gains in that same account.
A capital construction fund shall have three accounts:
The capital account.
The capital gain account.
The ordinary income account.
The capital account shall consist of—
amounts referred to in section 53505(a)(2) of this title;
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;
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
interest income exempt from taxation under section 103 of such Code (26 U.S.C. 103).
The capital gain account shall consist of—
amounts representing capital gains on assets held for more than 6 months and referred to in section 53505(a)(3) or (4) of this title; minus
amounts representing capital losses on assets held in the fund for more than 6 months.
The ordinary income account shall consist of—
amounts referred to in section 53505(a)(1) of this title;
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
amounts representing capital losses on assets held in the fund for not more than 6 months;
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;
ordinary income from a transaction described in section 53505(a)(3) of this title; and
that portion of any dividend referred to in subsection (b)(3) not taken into account under subsection (b)(3).
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.
Source credit: (Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1595.)
- 2006Enacted · Pub. L. 109-304 · 120 Stat. 1595
A history note hasn’t been published yet. The record shows enactment by Pub. L. 109-304 on 2006-10-06.
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