Page:United States Statutes at Large Volume 100 Part 3.djvu/402

 100 S T A T. 2210

P U B L I C L A W 9 9 - 5 1 4 — O C T. 22, 1986 "(A) the capital account, »,; • "(B) the capital gain account, and ' •>. J. ' '(C) the ordinary income account. "(2) CAPITAL ACCOUNT.—The capital account shall consist of— "(A) a m o u n t s referred to in subsection (a)(l KB), "(B) a m o u n t s referred to in subsection (a)(1)(C) other than that portion thereof which r e p r e s e n t s gain not t a k e n into account by reason of subsection (c)(1)(B), "(C) the percentage applicable under section 243(a)(1) of any dividend received by the fund with respect to which the person m a i n t a i n i n g the fund would (but for subsection (c)(1)(C)) be allowed a deduction under section 243, and "(D) interest income exempt from taxation under section 103. "(3) CAPITAL GAIN ACCOUNT. — The c a p i t a l g a i n accounts h a l l

consist of— "(A) a m o u n t s r e p r e s e n t i n g capital gains on assets held for more than 6 months and referred to in subsection (a)(1)(C) or (a)(1)(D), reduced by "(B) a m o u n t s r e p r e s e n t i n g capital losses on assets held in I? j the fund for more than 6 months. "(4) ORDINARY INCOME ACCOUNT. — The o r d i n a r y i n c o m e ac-

count shall consist of— "(A) a m o u n t s referred to in subsection (a)(1)(A), "(B)(i) a m o u n t s r e p r e s e n t i n g capital gains on assets held for 6 months or less and referred to in subsection (a)(1)(C) or (a)(1)(D), reduced by "(ii) a m o u n t s r e p r e s e n t i n g capital losses on assets held in the fund for 6 months or less, "(C) interest (not including any tax-exempt i n t e r e s t referred to in paragraph (2)(D)) and other ordinary income (not including any dividend referred to in subparagraph (E)) received on assets held in the fund, "(D) ordinary income from a t r a n s a c t i o n described in subsection (a)(1)(C), and "(E) the portion of any dividend referred to in paragraph (2)(C) not t a k e n into account under such paragraph. "(5) CAPITAL LOSSES ONLY ALLOWED TO OFFSET CERTAIN G A I N S. —

Except on termination of a capital construction fund, capital losses referred to in paragraph (3)(B) or in paragraph (4)(B)(ii) shall be allowed only as a n offset to gains referred to in paragraph (3)(A) or (4)(B)(i), respectively. "(e) P U R P O S E S OF QUALIFIED W I T H D R A W A L S. —

"(1) IN GENERAL.—A qualified w i t h d r a w a l from the fund is one m a d e in accordance with the term s of the a g r e e m e n t b u t only if it is for: "(A) the acquisition, construction, or reconstruction of a ',;f?i: qualified vessel, i: I "(B) the acquisition, construction, or reconstruction of barges and containers which a r e part of the c o m p l e m e n t of a qualified vessel, or "(C) the payment of the principal on indebtedness inIjif. curred in connection with the acquisition, construction, or reconstruction of a qualified vessel or a barge or c o n t a i n e r which is part of the complement of a qualified vessel. Except to the e x t e n t provided in regulations prescribed by the Secretary, subparagraph (B), and so much of subparagraph (C)

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