Page:United States Statutes at Large Volume 120.djvu/1630

 PUBLIC LAW 109–304—OCT. 6, 2006

120 STAT. 1599

taxable income under section 172(b)(2) of such Code (26 U.S.C. 172(b)(2)). ‘‘§ 53512. FIFO and LIFO withdrawals ‘‘(a) FIFO.—Except as provided in subsection (b), an amount withdrawn from an account under this chapter shall be treated as withdrawn on a first-in-first-out basis. ‘‘(b) LIFO.—An amount withdrawn from an account under this chapter shall be treated as withdrawn on a last-in-first-out basis if it is— ‘‘(1) a nonqualified withdrawal for research, development, and design expenses incident to new and advanced vessel design, machinery, and equipment; or ‘‘(2) an amount treated as a nonqualified withdrawal under section 53510(d) of this title. ‘‘§ 53513. Corporate reorganizations and partnership changes ‘‘Under joint regulations— ‘‘(1) a transfer of a capital construction fund from one person to another person in a transaction to which section 381 of the Internal Revenue Code of 1986 (26 U.S.C. 381) applies may be treated as if the transaction is not a nonqualified withdrawal; and ‘‘(2) a similar rule shall be applied to a continuation of a partnership (within the meaning of subchapter K of chapter 1 of such Code (26 U.S.C. 701 et seq.)). ‘‘§ 53514. Relationship of old fund to new fund ‘‘(a) DEFINITION.—In this section, the term ‘old fund’ means a capital construction fund maintained before October 21, 1970. ‘‘(b) ELECTION TO MAINTAIN OLD FUND.—A person maintaining an old fund may elect to continue the old fund, but may not— ‘‘(1) hold amounts in the old fund beyond the expiration date provided in the agreement under which the old fund is maintained (determined without regard to an extension or renewal made after April 14, 1970); or ‘‘(2) maintain simultaneously the old fund and a new fund established under this chapter. ‘‘(c) APPLICATION OF NEW FUND AGREEMENT TO OLD FUND AMOUNTS.—If a person makes an agreement under this chapter to establish a new fund, the person may agree to extend the agreement to some or all of the amounts in an old fund. Each item in the old fund to be transferred shall be transferred in a nontaxable transaction to the appropriate account in the new fund. For purposes of section 53511(c)(3) of this title, the date of the deposit of an item so transferred shall be July 1, 1971, or the date of the deposit in the old fund, whichever is later. ‘‘§ 53515. Records and reports ‘‘A person maintaining a fund under this chapter shall keep records and make reports as required by the Secretary or the Secretary of the Treasury.

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