Table of Contents
The following sections discuss CCF accounts and the types of bookkeeping accounts you must maintain when you invest in a CCF account. They also discuss the income tax treatment of CCF deposits, earnings, and withdrawals.
This section explains who can open a CCF account and how to use the account to defer income tax.
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Agreement vessels. Eligible vessels named in the agreement that will be the basis for the deferral of income tax.
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Planned use of withdrawals. Use of CCF funds to acquire, build, or rebuild a vessel.
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CCF depository. Where your CCF funds will be held.
NOAA/NMFS, Financial Services Division, F/MB5
Capital Construction Fund Program
1315 East-West Highway
Silver Spring, MD 20910-3282
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Be built or rebuilt in the United States.
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Be documented under the laws of the United States.
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Be used commercially in the fisheries of the United States.
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Be operated in the foreign or domestic commerce of the United States.
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Be built or rebuilt in the United States.
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Be owned by a U.S. citizen.
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Have a home port in the United States.
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Be used commercially in the fisheries of the United States.
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Making deposits to your CCF account from taxable income.
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Excluding from income deposits assigned to certain accounts (discussed later).
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Making withdrawals from your CCF account when you acquire, build, or rebuild fishing vessels.
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Reducing the basis of fishing vessels you acquire, build, or rebuild to recapture amounts previously excluded from tax.
This section discusses the three types of bookkeeping accounts you must maintain when you invest in a CCF account. Your total CCF deposits and earnings for any given year are limited to the amount attributed to these three accounts for that year.
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Allowable depreciation deductions for agreement vessels.
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Any nontaxable return of capital from either (a) or (b), below.
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The sale or other disposition of agreement vessels.
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Insurance or indemnity proceeds attributable to agreement vessels.
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Any tax-exempt interest earned on state or local bonds in your CCF account.
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Any capital gain from either of the following sources.
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The sale or other disposition of agreement vessels held for more than 6 months.
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Insurance or indemnity proceeds attributable to agreement vessels held for more than 6 months.
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Any capital gain from assets held in your CCF account for more than 6 months.
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Any earnings (without regard to the carryback of any net operating or net capital loss) from the operation of agreement vessels in the fisheries of the United States or in the foreign or domestic commerce of the United States.
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Any capital gain from the following sources reduced by any capital losses from assets held in your CCF account for 6 months or less.
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The sale or other disposition of agreement vessels held for 6 months or less.
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Insurance or indemnity proceeds attributable to agreement vessels held for 6 months or less.
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Any capital gain from assets held in your CCF account for 6 months or less.
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Any ordinary income (such as depreciation recapture) from either of the following sources.
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The sale or other disposition of agreement vessels.
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Insurance or indemnity proceeds attributable to agreement vessels.
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Any interest (not including tax-exempt interest from state and local bonds), most dividends, and other ordinary income earned on the assets in your CCF account.
This section explains the tax treatment of income used as the basis for CCF deposits.
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The sale or other disposition of an agreement vessel.
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The receipt of insurance or indemnity proceeds attributable to an agreement vessel.
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The sale or other disposition of an agreement vessel.
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The receipt of insurance or indemnity proceeds attributable to an agreement vessel.
If you deposit earnings from operations into your CCF account and you must complete other forms such as Form 6251, Alternative Minimum Tax (Individuals), or a worksheet for Schedule D (Form 1040), you will need to make an extra computation. When the other form instructs you to use the amount from Form 1040, line 41 (for 2005), do not use that amount. Instead, add Form 1040, lines 42 and 43 (for 2005), and use that amount.
This section explains the tax treatment of the earnings from the assets in your CCF account when the earnings are redeposited or left in your account. However, if you choose to withdraw the earnings in the year earned, you must generally pay income tax on them.
This section discusses the tax treatment of amounts you withdraw from your CCF account during the year.
A qualified withdrawal from a CCF account is one that is approved by NMFS for either of the following uses.
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Acquiring, building, or rebuilding qualified vessels (defined next).
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Making principal payments on the mortgage of a qualified vessel.
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NMFS will not approve amounts withdrawn to purchase nets not continuously attached to the vessel, such as seine nets, gill set-nets, and gill drift-nets.
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NMFS will approve amounts withdrawn to purchase trawl nets.
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The vessel was built or rebuilt in the United States.
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The vessel is documented under the laws of the United States.
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The person maintaining the CCF account agrees with the Secretary of Commerce that the vessel will be operated in United States foreign trade, Great Lakes trade, noncontiguous domestic trade, or the fisheries of the United States.
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The capital account.
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The capital gain account.
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The ordinary income account.
Reduce the depreciable basis of fishing vessels you acquire, build, or rebuild when you make a qualified withdrawal from either the capital gain or the ordinary income account.
A nonqualified withdrawal from a CCF account is generally any withdrawal that is not a qualified withdrawal. Qualified withdrawals are defined under Qualified Withdrawals, earlier.
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Amounts remaining in a CCF account upon termination of your agreement with NMFS.
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Amounts you withdraw and use to make principal payments on the mortgage of a vessel if the basis of that vessel and the bases of other vessels you own have already been reduced to zero.
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Amounts determined by the IRS to cause your CCF account balance to exceed the amount appropriate to meet your planned use of withdrawals. You will generally be given 3 years to revise your plans to cover this excess balance.
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Amounts you leave in your account for more than 25 years. There is a graduated schedule under which the percentage applied to determine the amount of the nonqualified withdrawal increases from 20% in the 26th year to 100% in the 30th year.
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The ordinary income account.
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The capital gain account.
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The capital account.
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The part that did not reduce your tax liability for any year prior to the withdrawal year is not taxed.
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That part is allowed as a net operating loss deduction.
This section briefly discussed the CCF program. For more detailed information, see the following legislative authorities.
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Section 607 of the Merchant Marine Act of 1936, as amended (46 U.S.C. 1177).
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Chapter 2, Part 259 of title 50 of the Code of Federal Regulations (50 C.F.R., Part 259).
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Subchapter A, Part 3 of title 26 of the Code of Federal Regulations (26 C.F.R., Part 3).
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Section 7518 of the Internal Revenue Code (IRC 7518).
The application kit you can obtain from NMFS at the address or phone number given earlier may contain copies of some of these sources of additional information. Also, see their web page at www.nmfs.noaa.gov/mb/financial_services/ccf.htm.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
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Call the Taxpayer Advocate toll free at
1-877-777-4778, -
Call, write, or fax the Taxpayer Advocate office in your area,
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Call 1-800-829-4059 if you are a
TTY/TDD user, or -
Visit www.irs.gov/advocate.
Internet. You can access the IRS website 24 hours a day, 7 days a week, at www.irs.gov to:
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E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
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Check the status of your refund. Click on Where's My Refund. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
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Download forms, instructions, and publications.
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Order IRS products online.
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Research your tax questions online.
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Search publications online by topic or keyword.
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View Internal Revenue Bulletins (IRBs) published in the last few years.
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Figure your withholding allowances using our Form W-4 calculator.
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Sign up to receive local and national tax news by email.
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Get information on starting and operating a small business.
Phone. Many services are available by phone.
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Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications and prior-year forms and instructions. You should receive your order within 10 days.
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Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
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Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
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TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
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TeleTax topics. Call 1-800-829-4477 and press 2 to listen to pre-recorded messages covering various tax topics.
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Refund information. If you would like to check the status of your refund, call 1-800-829-4477 and press 1 for automated refund information and follow the recorded instructions or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers,
we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to
sometimes listen in on or
record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
Walk-in. Many products and services are available on a walk-in basis.
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Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
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Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary, but if you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
Mail. You can send your order for forms, instructions, and publications to the address below and receive a response within 10 business days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
CD-ROM for tax products. You can order Publication 1796, IRS Tax Products on CD-ROM, and obtain:
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A CD that is released twice so you have the latest products. The first release ships in late December and the final release ships in late February.
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Current-year forms, instructions, and publications.
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Prior-year forms, instructions, and publications.
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Tax Map: an electronic research tool and finding aid.
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Tax law frequently asked questions (FAQs).
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Tax Topics from the IRS telephone response system.
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Fill-in, print, and save features for most tax forms.
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Internal Revenue Bulletins.
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Toll-free and email technical support.
Buy the CD-ROM from National Technical Information Service (NTIS) at www.irs.gov/cdorders for $25 (no handling fee) or call 1-877-233-6767 toll free to buy the CD-ROM for $25 (plus a $5 handling fee).
CD-ROM for small businesses. Publication 3207, Small Business Resource Guide CD-ROM, has a new look and enhanced navigation features. This CD includes:
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Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
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All the business tax forms, instructions, and publications needed to successfully manage a business.
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Tax law changes.
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IRS Tax Map to help you find forms, instructions, and publications by searching on a keyword or topic.
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Web links to various government agencies, business associations, and IRS organizations.
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“Rate the Product” survey—your opportunity to suggest changes for future editions.
An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or by visiting www.irs.gov/smallbiz.
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