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46 U.S.C. § 53512 — FIFO and LIFO withdrawals
Federal law — U.S. Code and appendices · legal_authorities
**(a) FIFO.—** Except as provided in subsection (b), an amount withdrawn from an account under this chapter shall be treated as withdrawn on a first-in-first-out basis.
**(b) LIFO.—** An amount withdrawn from an account under this chapter shall be treated as withdrawn on a last-in-first-out basis if it is—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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53510/d&num=0&edition=prelim).
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Source location: Title 46, Chapter 535, § 53512; chapter-535-capital-construction-funds.md
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**(a) FIFO.—** Except as provided in subsection (b), an amount withdrawn from an account under this chapter shall be treated as withdrawn on a first-in-first-out basis.
**(b) LIFO.—** An amount withdrawn from an account under this chapter shall be treated as withdrawn on a last-in-first-out basis if it is—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](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53510/d&num=0&edition=prelim).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In General.—** Except as provided in [section 53513 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section53513&num=0&edition=prelim), a withdrawal from a fund that is not a qualified withdrawal shall be treated as a nonqualified withdrawal.
**(b) Order of Withdrawals.—** A nonqualified withdrawal shall be treated as made—
(1) first from the ordinary income account;
(2) second from the capital gain account; and
(3) third from the capital account.
**(c) Tax Treatment.—** For purposes of the Internal Revenue Code of 1986 ([26 U.S.C. 1](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1&num=0&edition=prelim) et seq.)—
(1) a nonqualified withdrawal from the ordinary income account shall be included in income as an item of ordinary income for the taxable year in which the withdrawal is made;
(2) a nonqualified withdrawal from the capital gain account shall be included in income for the taxable year in which the withdrawal is made as an item of gain realized during that year from the disposition of an asset held for more than 6 months; and
(3) for the period through the last date prescribed for payment of tax for the taxable year in which the withdrawal is made—
(A) no interest shall be payable under section 6601 of such Code ([26 U.S.C. 6601](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6601&num=0&edition=prelim)) and no addition to the tax shall be payable under section 6651 of such Code ([26 U.S.C. 6651](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6651&num=0&edition=prelim));
(B) interest on the amount of the additional tax attributable to an amount treated as a nonqualified withdrawal from the ordinary income account or the cap
Source: Supplied U.S. Code snapshot — release unconfirmed · 46 U.S.C. § 53511
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Federal law — U.S. Code and appendices · legal_authorities
Page 432
TITLE 46—SHIPPING
§ 53512
of such Code (26 U.S.C. 172) for the taxable
year in which the withdrawal occurs.
(4) COORDINATION
WITH
DEDUCTION
FOR
NET
OPERATING LOSSES.—A nonqualified withdrawal
excluded from gross income under paragraph
(1) shall be excluded in determining taxable in-
come under section 172(b)(2) of such Code (26
U.S.C. 172(b)(2)).
(Pub. L. 109–304, § 8(c), Oct. 6, 2006, 120 Stat. 1597;
Pub. L. 112–240, title I, § 102(c)(1)(E), Jan. 2, 2013,
126 Stat. 2319.)
HISTORICAL AND REVISION NOTES
Revised
Section
Source (U.S. Code)
Source (Statutes at Large)
53511 ..........
46 App.:1177(h) (less
(2) (last sen-
tence)).
June 29, 1936, ch. 858, title
VI, § 607(h) (less (2) (last
sentence)), 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. 1030; Pub.
L. 97–31, § 12(97)(A), Aug. 6,
1981, 95 Stat. 162; Pub. L.
99–514, title II, § 261(e)(6),
Oct. 22, 1986, 100 Stat. 2215;
Pub. L. 100–647, title I,
§ 1002(m)(2), Nov. 10, 1988,
102 Stat. 3382; Pub. L.
101–508,
title
XI,
§ 11101(d)(7)(B),
Nov.
5,
1990, 104 Stat. 1388–405;
Pub. L. 105–34, title III,
§ 311(c)(2), Aug. 5, 1997, 111
Stat. 835; Pub. L. 108–27,
title III, § 301(a)(2)(E), May
28, 2003, 117 Stat. 758.
In subsection (c)(3)(C), the words ‘‘or in the case of
any nonqualified withdrawal arising from the applica-
tion of the recapture provision of section 1176(5) of this
Appendix as in effect on December 31, 1969’
Source: Supplied 2024 U.S. Code historical extraction · 46 U.S.C. § 53512
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.