Page:United States Statutes at Large Volume 100 Part 3.djvu/406

 100 S T A T. 2 2 1 4

P U B L I C L A W 9 9 - 5 1 4 — O C T. 22, 1986

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"(i) such portion shall not be t a k e n into account under subparagraph (A), and "(ii) a n a m o u n t equal to such portion shall be treated as allowed a s a deduction under section 172 for the taxable year in which such w i t h d r a w a l occurs. "(C) COORDINATION WITH DEDUCTION FOR N E T OPERATING

LOSSES.—Any nonqualified w i t h d r a w a l excluded from gross income under subparagraph (A) shall be excluded in determining taxable income under section 172(b)(2). "(h) CERTAIN CORPORATE REORGANIZATIONS AND C H A N G E S I N P A R T -

NERSHIPS.—Under joint regulations— " ( D a transfer of a fund from one person to a n other person in a transaction to which section 381 applies may be t r e a t e d as if such transaction did not constitute a nonqualified withdrawal, and "(2) a similar rule shall be applied in the case of a continuation of a partnership. "(i) DEFINITIONS.—For purposes of this section, any term defined in section 607(k) of the M e r c h a n t Marine Act, 1936 which is also used in this section (including the definition of 'Secretary') shall have the m e a n i n g given such term by such section 607(k) a s in effect on the date of the e n a c t m e n t of this section." (c) CREDITS N O T ALLOWED A G A I N S T INCREASE I N T A X. — Paragraph

(2) of section 26(b) is amended by striking out " and " a t the end of subparagraph (G), by striking o u t the period a t the end of subparagraph (H) and inserting in lieu thereof ", and ", and by adding a t the end thereof the following new subparagraph: "(I) subparagraph (A) of section 7518(g)(6) (relating to nonqualified w i t h d r a w a l s from capital construction funds taxed a t highest m a r g i n a l rate)." (d) DEPARTMENTAL REPORTS AND CERTIFICATION.—Section 607 of

the M e r c h a n t Marine Act, 1936, is amended by adding a t the end thereof the following new subsection: "(m) DEPARTMENTAL REPORTS AND CERTIFICATION.—

"(1) IN GENERAL.—For each calendar year, the shall each provide the Secretary of the Treasury, days after the close of such calendar year, a w r i t t e n respect to those capital construction funds that a r e jurisdiction. «^

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Secretaries within 120 report with under their

"(2) CONTENTS OF REPORTS.—Each report shall set forth

the

n a m e and tax p a y e r identification n u m b e r of each person— "(A) establishing a capital construction fund during such calendar year; "(B) m a i n t a i n i n g a capital construction fund a s of the last day of such calendar year; "(C) term i n a t i n g a capital construction fund during such c a l e n d a r year; "(D) making any w i t h d r a w a l from or deposit into (and the a m o u n t s thereof) a capital construction fund during such calendar year; or "(E) with respect to which a determination has been made during such calendar year that such person has failed to fulfill a substantial obligation under any capital construction fund a g r e e m e n t to which such person is a party." (e) CONFORMING AMENDMENTS. —

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