{"identifier":"/us/usc/t26/s1355","title":26,"num":"\u00a7\u202f1355.","heading":"Definitions and special rules","text":"\u00a7\u202f1355.\nDefinitions and special rules\n(a)\nDefinitions\nFor purposes of this subchapter\u2014\n(1)\nElecting corporation\nThe term \u201celecting corporation\u201d means any corporation for which an election is in effect under this subchapter.\n(2)\nElecting group; controlled group\n(A)\nElecting group\nThe term \u201celecting group\u201d means a controlled group of which one or more members is an electing corporation.\n(B)\nControlled group\nThe term \u201ccontrolled group\u201d means any group which would be treated as a single employer under subsection (a) or (b) of section 52 if paragraphs (1) and (2) of section 52(a) did not apply.\n(3)\nQualifying vessel operator\nThe term \u201cqualifying vessel operator\u201d means any corporation\u2014\n(A) who operates one or more qualifying vessels, and\n(B) who meets the shipping activity requirement in subsection (c).\n(4)\nQualifying vessel\nThe term \u201cqualifying vessel\u201d means a self-propelled (or a combination self-propelled and non-self-propelled) United States flag vessel of not less than 6,000 deadweight tons used exclusively in the United States foreign trade during the period that the election under this subchapter is in effect.\n(5)\nUnited States flag vessel\nThe term \u201cUnited States flag vessel\u201d means any vessel documented under the laws of the United States.\n(6)\nUnited States domestic trade\nThe term \u201cUnited States domestic trade\u201d means the transportation of goods or passengers between places in the United States.\n(7)\nUnited States foreign trade\nThe term \u201cUnited States foreign trade\u201d means the transportation of goods or passengers between a place in the United States and a foreign place or between foreign places.\n(b)\nOperating a vessel\nFor purposes of this subchapter\u2014\n(1)\nIn general\nExcept as provided in paragraph (2), a person is treated as operating any vessel during any period if\u2014\n(A)\n(i) such vessel is owned by, or chartered (including a time charter) to, the person, or\n(ii) the person provides services for such vessel pursuant to an operating agreement, and\n(B) such vessel is in use as a qualifying vessel during such period.\n(2)\nBareboat charters\nA person is treated as operating and using a vessel that it has chartered out on bareboat charter terms only if\u2014\n(A)\n(i) the vessel is temporarily surplus to the person\u2019s requirements and the term of the charter does not exceed 3 years, or\n(ii) the vessel is bareboat chartered to a member of a controlled group which includes such person or to an unrelated person who sub-bareboats or time charters the vessel to such a member (including the owner of the vessel), and\n(B) the vessel is used as a qualifying vessel by the person to whom ultimately chartered.\n(c)\nShipping activity requirement\nFor purposes of this section\u2014\n(1)\nIn general\nExcept as otherwise provided in this subsection, a corporation meets the shipping activity requirement of this subsection for any taxable year only if the requirement of paragraph (4) is met for each of the 2 preceding taxable years.\n(2)\nSpecial rule for 1st year of election\nA corporation meets the shipping activity requirement of this subsection for the first taxable year for which the election under section 1354(a) is in effect only if the requirement of paragraph (4) is met for the preceding taxable year.\n(3)\nControlled groups\nA corporation who is a member of a controlled group meets the shipping activity requirement of this subsection only if such requirement is met determined by treating all members of such group as 1 person.\n(4)\nRequirement\nThe requirement of this paragraph is met for any taxable year if, on average during such year, at least 25 percent of the aggregate tonnage of qualifying vessels used by the corporation were owned by such corporation or chartered to such corporation on bareboat charter terms.\n(d)\nActivities carried on partnerships, etc.\nIn applying this subchapter to a partner in a partnership\u2014\n(1) each partner shall be treated as operating vessels operated by the partnership,\n(2) each partner shall be treated as conducting the activities conducted by the partnership, and\n(3) the extent of a partner\u2019s ownership, charter, or operating agreement interest in any vessel operated by the partnership shall be determined on the basis of the partner\u2019s interest in the partnership.\nA similar rule shall apply with respect to other pass-thru entities.\n(e)\nEffect of temporarily ceasing to operate a qualifying vessel\n(1)\nIn general\nFor purposes of subsections (b) and (c), an electing corporation shall be treated as continuing to use a qualifying vessel during any period of temporary cessation if the electing corporation gives timely notice to the Secretary stating\u2014\n(A) that it has temporarily ceased to operate the qualifying vessel, and\n(B) its intention to resume operating the qualifying vessel.\n(2)\nNotice\nNotice shall be deemed timely if given not later than the due date (including extensions) for the corporation\u2019s tax return for the taxable year in which the temporary cessation begins.\n(3)\nPeriod disregard in effect\nThe period of temporary cessation under paragraph (1) shall continue until the earlier of the date on which\u2014\n(A) the electing corporation abandons its intention to resume operation of the qualifying vessel, or\n(B) the electing corporation resumes operation of the qualifying vessel.\n(f)\nEffect of temporarily operating a qualifying vessel in the United States domestic trade\n(1)\nIn general\nFor purposes of this subchapter, an electing corporation shall be treated as continuing to use a qualifying vessel in the United States foreign trade during any period of temporary use in the United States domestic trade if the electing corporation gives timely notice to the Secretary stating\u2014\n(A) that it temporarily operates or has operated in the United States domestic trade a qualifying vessel which had been used in the United States foreign trade, and\n(B) its intention to resume operation of the vessel in the United States foreign trade.\n(2)\nNotice\nNotice shall be deemed timely if given not later than the due date (including extensions) for the corporation\u2019s tax return for the taxable year in which the temporary cessation begins.\n(3)\nPeriod disregard in effect\nThe period of temporary use under paragraph (1) continues until the earlier of the date on which\u2014\n(A) the electing corporation abandons its intention to resume operations of the vessel in the United States foreign trade, or\n(B) the electing corporation resumes operation of the vessel in the United States foreign trade.\n(4)\nNo disregard if domestic trade use exceeds 30 days\nParagraph (1) shall not apply to any qualifying vessel which is operated in the United States domestic trade for more than 30 days during the taxable year.\n(g)\nGreat Lakes domestic shipping to not disqualify vessel\n(1)\nIn general\nIf the electing corporation elects (at such time and in such manner as the Secretary may require) to apply this subsection for any taxable year to any qualifying vessel which is used in qualified zone domestic trade during the taxable year\u2014\n(A) solely for purposes of subsection (a)(4), such use shall be treated as use in United States foreign trade (and not as use in United States domestic trade), and\n(B) subsection (f) shall not apply with respect to such vessel for such taxable year.\n(2)\nEffect of temporarily operating vessel in United States domestic trade\nIn the case of a qualifying vessel to which this subsection applies\u2014\n(A)\nIn general\nAn electing corporation shall be treated as using such vessel in qualified zone domestic trade during any period of temporary use in the United States domestic trade (other than qualified zone domestic trade) if the electing corporation gives timely notice to the Secretary stating\u2014\n(i) that it temporarily operates or has operated in the United States domestic trade (other than qualified zone domestic trade) a qualifying vessel which had been used in the United States foreign trade or qualified zone domestic trade, and\n(ii) its intention to resume operation of the vessel in the United States foreign trade or qualified zone domestic trade.\n(B)\nNotice\nNotice shall be deemed timely if given not later than the due date (including extensions) for the corporation\u2019s tax return for the taxable year in which the temporary cessation begins.\n(C)\nPeriod disregard in effect\nThe period of temporary use under subparagraph (A) continues until the earlier of the date of which\u2014\n(i) the electing corporation abandons its intention to resume operations of the vessel in the United States foreign trade or qualified zone domestic trade, or\n(ii) the electing corporation resumes operation of the vessel in the United States foreign trade or qualified zone domestic trade.\n(D)\nNo disregard if domestic trade use exceeds 30 days\nSubparagraph (A) shall not apply to any qualifying vessel which is operated in the United States domestic trade (other than qualified zone domestic trade) for more than 30 days during the taxable year.\n(3)\nAllocation of income and deductions to qualifying shipping activities\nIn the case of a qualifying vessel to which this subsection applies, the Secretary shall prescribe rules for the proper allocation of income, expenses, losses, and deductions between the qualified shipping activities and the other activities of such vessel.\n(4)\nQualified zone domestic trade\nFor purposes of this subsection\u2014\n(A)\nIn general\nThe term \u201cqualified zone domestic trade\u201d means the transportation of goods or passengers between places in the qualified zone if such transportation is in the United States domestic trade.\n(B)\nQualified zone\nThe term \u201cqualified zone\u201d means the Great Lakes Waterway and the St. Lawrence Seaway.\n(h)\nRegulations\nThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.","url":"https://projectusc.org/usc/t26/s1355.html","content":[{"t":"sec","id":"/us/usc/t26/s1355","children":[{"t":"num","text":"\u00a7\u202f1355."},{"t":"heading","text":"Definitions and special rules"},{"t":"subsec","id":"/us/usc/t26/s1355/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Definitions"},{"t":"chapeau","text":"For purposes of this subchapter\u2014"},{"t":"para","id":"/us/usc/t26/s1355/a/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Electing corporation"},{"t":"content","children":[{"t":"p","text":"The term \u201celecting corporation\u201d means any corporation for which an election is in effect under this subchapter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/a/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Electing group; controlled group"},{"t":"subpara","id":"/us/usc/t26/s1355/a/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Electing group"},{"t":"content","children":[{"t":"p","text":"The term \u201celecting group\u201d means a controlled group of which one or more members is an electing corporation.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/a/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Controlled group"},{"t":"content","children":[{"t":"p","text":"The term \u201ccontrolled group\u201d means any group which would be treated as a single employer under subsection (a) or (b) of section 52 if paragraphs (1) and (2) of section 52(a) did not apply.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/a/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Qualifying vessel operator"},{"t":"chapeau","text":"The term \u201cqualifying vessel operator\u201d means any corporation\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/a/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" who operates one or more qualifying vessels, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/a/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" who meets the shipping activity requirement in subsection (c).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/a/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Qualifying vessel"},{"t":"content","children":[{"t":"p","text":"The term \u201cqualifying vessel\u201d means a self-propelled (or a combination self-propelled and non-self-propelled) United States flag vessel of not less than 6,000 deadweight tons used exclusively in the United States foreign trade during the period that the election under this subchapter is in effect.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/a/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"United States flag vessel"},{"t":"content","children":[{"t":"p","text":"The term \u201cUnited States flag vessel\u201d means any vessel documented under the laws of the United States.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/a/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"United States domestic trade"},{"t":"content","children":[{"t":"p","text":"The term \u201cUnited States domestic trade\u201d means the transportation of goods or passengers between places in the United States.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/a/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"United States foreign trade"},{"t":"content","children":[{"t":"p","text":"The term \u201cUnited States foreign trade\u201d means the transportation of goods or passengers between a place in the United States and a foreign place or between foreign places.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Operating a vessel"},{"t":"chapeau","text":"For purposes of this subchapter\u2014"},{"t":"para","id":"/us/usc/t26/s1355/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"Except as provided in paragraph (2), a person is treated as operating any vessel during any period if\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"clause","id":"/us/usc/t26/s1355/b/1/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" such vessel is owned by, or chartered (including a time charter) to, the person, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s1355/b/1/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the person provides services for such vessel pursuant to an operating agreement, and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" such vessel is in use as a qualifying vessel during such period.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Bareboat charters"},{"t":"chapeau","text":"A person is treated as operating and using a vessel that it has chartered out on bareboat charter terms only if\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/b/2/A","children":[{"t":"num","text":"(A)"},{"t":"clause","id":"/us/usc/t26/s1355/b/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the vessel is temporarily surplus to the person\u2019s requirements and the term of the charter does not exceed 3 years, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s1355/b/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the vessel is bareboat chartered to a member of a controlled group which includes such person or to an unrelated person who sub-bareboats or time charters the vessel to such a member (including the owner of the vessel), and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/b/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the vessel is used as a qualifying vessel by the person to whom ultimately chartered.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Shipping activity requirement"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s1355/c/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"Except as otherwise provided in this subsection, a corporation meets the shipping activity requirement of this subsection for any taxable year only if the requirement of paragraph (4) is met for each of the 2 preceding taxable years.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/c/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Special rule for 1st year of election"},{"t":"content","children":[{"t":"p","text":"A corporation meets the shipping activity requirement of this subsection for the first taxable year for which the election under section 1354(a) is in effect only if the requirement of paragraph (4) is met for the preceding taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/c/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Controlled groups"},{"t":"content","children":[{"t":"p","text":"A corporation who is a member of a controlled group meets the shipping activity requirement of this subsection only if such requirement is met determined by treating all members of such group as 1 person.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/c/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Requirement"},{"t":"content","children":[{"t":"p","text":"The requirement of this paragraph is met for any taxable year if, on average during such year, at least 25 percent of the aggregate tonnage of qualifying vessels used by the corporation were owned by such corporation or chartered to such corporation on bareboat charter terms.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Activities carried on partnerships, etc."},{"t":"chapeau","text":"In applying this subchapter to a partner in a partnership\u2014"},{"t":"para","id":"/us/usc/t26/s1355/d/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" each partner shall be treated as operating vessels operated by the partnership,","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/d/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" each partner shall be treated as conducting the activities conducted by the partnership, and","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/d/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" the extent of a partner\u2019s ownership, charter, or operating agreement interest in any vessel operated by the partnership shall be determined on the basis of the partner\u2019s interest in the partnership.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"A similar rule shall apply with respect to other pass-thru entities.","tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Effect of temporarily ceasing to operate a qualifying vessel"},{"t":"para","id":"/us/usc/t26/s1355/e/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of subsections (b) and (c), an electing corporation shall be treated as continuing to use a qualifying vessel during any period of temporary cessation if the electing corporation gives timely notice to the Secretary stating\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/e/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" that it has temporarily ceased to operate the qualifying vessel, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/e/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" its intention to resume operating the qualifying vessel.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/e/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Notice"},{"t":"content","children":[{"t":"p","text":"Notice shall be deemed timely if given not later than the due date (including extensions) for the corporation\u2019s tax return for the taxable year in which the temporary cessation begins.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/e/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Period disregard in effect"},{"t":"chapeau","text":"The period of temporary cessation under paragraph (1) shall continue until the earlier of the date on which\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/e/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the electing corporation abandons its intention to resume operation of the qualifying vessel, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/e/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the electing corporation resumes operation of the qualifying vessel.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Effect of temporarily operating a qualifying vessel in the United States domestic trade"},{"t":"para","id":"/us/usc/t26/s1355/f/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"For purposes of this subchapter, an electing corporation shall be treated as continuing to use a qualifying vessel in the United States foreign trade during any period of temporary use in the United States domestic trade if the electing corporation gives timely notice to the Secretary stating\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/f/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" that it temporarily operates or has operated in the United States domestic trade a qualifying vessel which had been used in the United States foreign trade, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/f/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" its intention to resume operation of the vessel in the United States foreign trade.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/f/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Notice"},{"t":"content","children":[{"t":"p","text":"Notice shall be deemed timely if given not later than the due date (including extensions) for the corporation\u2019s tax return for the taxable year in which the temporary cessation begins.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/f/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Period disregard in effect"},{"t":"chapeau","text":"The period of temporary use under paragraph (1) continues until the earlier of the date on which\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/f/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the electing corporation abandons its intention to resume operations of the vessel in the United States foreign trade, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/f/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the electing corporation resumes operation of the vessel in the United States foreign trade.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/f/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"No disregard if domestic trade use exceeds 30 days"},{"t":"content","children":[{"t":"p","text":"Paragraph (1) shall not apply to any qualifying vessel which is operated in the United States domestic trade for more than 30 days during the taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Great Lakes domestic shipping to not disqualify vessel"},{"t":"para","id":"/us/usc/t26/s1355/g/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"If the electing corporation elects (at such time and in such manner as the Secretary may require) to apply this subsection for any taxable year to any qualifying vessel which is used in qualified zone domestic trade during the taxable year\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/g/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" solely for purposes of subsection (a)(4), such use shall be treated as use in United States foreign trade (and not as use in United States domestic trade), and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/g/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" subsection (f) shall not apply with respect to such vessel for such taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/g/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Effect of temporarily operating vessel in United States domestic trade"},{"t":"chapeau","text":"In the case of a qualifying vessel to which this subsection applies\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/g/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"An electing corporation shall be treated as using such vessel in qualified zone domestic trade during any period of temporary use in the United States domestic trade (other than qualified zone domestic trade) if the electing corporation gives timely notice to the Secretary stating\u2014"},{"t":"clause","id":"/us/usc/t26/s1355/g/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" that it temporarily operates or has operated in the United States domestic trade (other than qualified zone domestic trade) a qualifying vessel which had been used in the United States foreign trade or qualified zone domestic trade, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s1355/g/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" its intention to resume operation of the vessel in the United States foreign trade or qualified zone domestic trade.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/g/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Notice"},{"t":"content","children":[{"t":"p","text":"Notice shall be deemed timely if given not later than the due date (including extensions) for the corporation\u2019s tax return for the taxable year in which the temporary cessation begins.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/g/2/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Period disregard in effect"},{"t":"chapeau","text":"The period of temporary use under subparagraph (A) continues until the earlier of the date of which\u2014"},{"t":"clause","id":"/us/usc/t26/s1355/g/2/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" the electing corporation abandons its intention to resume operations of the vessel in the United States foreign trade or qualified zone domestic trade, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s1355/g/2/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" the electing corporation resumes operation of the vessel in the United States foreign trade or qualified zone domestic trade.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/g/2/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"No disregard if domestic trade use exceeds 30 days"},{"t":"content","children":[{"t":"p","text":"Subparagraph (A) shall not apply to any qualifying vessel which is operated in the United States domestic trade (other than qualified zone domestic trade) for more than 30 days during the taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/g/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Allocation of income and deductions to qualifying shipping activities"},{"t":"content","children":[{"t":"p","text":"In the case of a qualifying vessel to which this subsection applies, the Secretary shall prescribe rules for the proper allocation of income, expenses, losses, and deductions between the qualified shipping activities and the other activities of such vessel.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s1355/g/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Qualified zone domestic trade"},{"t":"chapeau","text":"For purposes of this subsection\u2014"},{"t":"subpara","id":"/us/usc/t26/s1355/g/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The term \u201cqualified zone domestic trade\u201d means the transportation of goods or passengers between places in the qualified zone if such transportation is in the United States domestic trade.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s1355/g/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Qualified zone"},{"t":"content","children":[{"t":"p","text":"The term \u201cqualified zone\u201d means the Great Lakes Waterway and the St. Lawrence Seaway.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s1355/h","children":[{"t":"num","text":"(h)"},{"t":"heading","text":"Regulations"},{"t":"content","children":[{"t":"p","text":"The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}