---
kind: "section"
citation: "46 U.S.C. § 53507"
title: "46"
title_heading: "Shipping"
number: "53507"
heading: "Nontaxation of deposits"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/46/53507"
units:
  - "Subtitle V — Merchant Marine"
  - "Part C — Financial Assistance Programs"
  - "Chapter 535 — Capital Construction Funds"
---

# §53507. Nontaxation of deposits

- (a) **Tax Treatment.—** Subject to [subsection (b)](#b), under the Internal Revenue Code of 1986 ([26 U.S.C. 1](/usc/26/1.md) et seq.)—
  - (1) taxable income (determined without regard to this chapter and section 7518 of such Code ([26 U.S.C. 7518](/usc/26/7518.md))) 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](/usc/46/53505.md?p=a-1);
  - (2) a gain from a transaction referred to in [section 53505(a)(3) of this title](/usc/46/53505.md?p=a-3) shall not be taken into account if an amount equal to the net proceeds (as defined in [joint regulations](/usc/46/53501.md?p=3)) 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](/usc/26/316.md))) shall be determined without regard to this chapter and [section 7518](/usc/26/7518.md) of such Code ([26 U.S.C. 7518](/usc/26/7518.md)); and
  - (5) in applying the tax imposed by section 531 of such Code ([26 U.S.C. 531](/usc/26/531.md)), amounts held in the fund shall not be taken into account.
- (b) **Condition.—** This section applies to an amount only if the amount is deposited in the fund under the [agreement](/usc/46/53201.md?p=8) within the time provided in [joint regulations](/usc/46/53501.md?p=3).

## Source credit

(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1594.)

## Notes

| Historical and Revision Notes |  |  |
| --- | --- | --- |
| Revised<br>Section | Source (U.S. Code) | Source (Statutes at Large) |
| 53507 | 46 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. |