---
kind: "section"
citation: "46 U.S.C. § 53505"
title: "46"
title_heading: "Shipping"
number: "53505"
heading: "Ceiling on deposits"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/53505"
units:
  - "Subtitle V — Merchant Marine"
  - "Part C — Financial Assistance Programs"
  - "Chapter 535 — Capital Construction Funds"
---

# §53505. Ceiling on deposits

- (a) **Maximum Deposits.—** The amount deposited in a capital [construction](/usc/46/53701.md?p=3) fund for a taxable year may not exceed the sum of—
  - (1) that portion of the taxable income of the owner or lessee for the taxable year (computed under [chapter 1](/usc/46/chstI/ch1.md) of the Internal Revenue Code of 1986 (26 U.S.C. [ch. 1](/usc/46/chstI/ch1.md)) but without regard to the carryback of net operating loss or net capital loss or this chapter) that is attributable to the operation of [agreement vessels](/usc/46/53501.md?p=1) in the foreign or domestic trade of the [United States](/usc/46/53101.md?p=10) or in the fisheries of the [United States](/usc/46/53101.md?p=10);
  - (2) the amount allowable as a deduction under section 167 of such Code ([26 U.S.C. 167](/usc/26/167.md)) for the taxable year for [agreement vessels](/usc/46/53501.md?p=1);
  - (3) if the transaction is not taken into account for purposes of [paragraph (1)](#a-1), the net proceeds (as defined in [joint regulations](/usc/46/53501.md?p=3)) from the disposition of an [agreement vessel](/usc/46/53501.md?p=1) or from insurance or indemnity attributable to an [agreement vessel](/usc/46/53501.md?p=1); and
  - (4) the receipts from the investment or reinvestment of amounts held in the fund.
- (b) **Reductions for Lessees.—** For a lessee, the maximum amount that may be deposited for an [agreement vessel](/usc/46/53501.md?p=1) under [subsection (a)(2)](#a-2) for any period shall be reduced by any amount the owner is required or permitted, under the capital [construction](/usc/46/53701.md?p=3) fund [agreement](/usc/46/53201.md?p=8), to deposit for that period for the [vessel](/usc/46/53501.md?p=9) under [subsection (a)(2)](#a-2).

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1593.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 53505 | 46 App.:1177(b)(1), (2). | June 29, 1936, ch. 858, title VI, § 607(b)(1), (2), 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. 1027. |

In subsection (a)(1), the word “trade” is substituted for “commerce” for consistency in the chapter.