‘‘(B) If the person maintaining the fund is
a corporation, there shall be excluded the per-
centage applicable under section 243(a)(1) of
such Code of any dividend received by the fund
with respect to which such person would (but
for paragraph (1)(A)) be allowed a deduction
under section 243 of such Code.
‘‘(C) Losses from the sale or exchange of
capital assets shall be allowed only to the extent
of gains from such sales or exchanges.
‘‘(D) There shall be excluded—
‘‘(i) earnings on amounts deposited in
the fund which are attributable to vessels
documented under the laws of the United
States for operation in the fisheries of the
United States, and
‘‘(ii) earnings on earnings described in
clause (i).’’
(2) Subparagraph (D) of section 607(b)(1) of
such Act is amended by inserting ‘‘reduced by the
tax imposed on such receipts under subsection (n)’’
after ‘‘in such fund’’.
(3) Subparagraph (C) of section 607(d)(1) of
such Act is amended by striking ‘‘shall not be taken
into account’’ and inserting ‘‘shall be taken into ac-
count as provided in subsection (n)’’.
(4) Paragraph (2) of section 607(e) of such Act
is amended by striking ‘‘and’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, and’’, and by adding
at the end thereof the following new subparagraph:
‘‘(F) the taxable earnings (as defined in
subsection (n)) of the fund for any taxable year
beginning after the date of the enactment of the
Merchant Marine Investment Act of 1993.’’
(5) Paragraph (3) of section 607(e) of such Act
is amended by adding at the end thereof the follow-
ing new sentence:
‘‘Any amount included in the taxable earnings (as
defined in subsection (n)) of the fund for any tax-
able year beginning after the date of the enactment
of the Merchant Marine Investment Act of 1993
shall not be taken into account under this para-
graph.’’
(6) Paragraph (4) of section 607(e) of such Act
is amended by adding at the end thereof the follow-
ing new sentence:
‘‘In the case of taxable years beginning after the
date of the enactment of the Merchant Marine In-
vestment Act of 1993, any amount included in the
taxable earnings (as defined in subsection (n)) of the
fund shall not be taken into account under subpara-
graph (B), and subparagraphs (C) and (E) shall not
apply.’’
(7) Paragraph (1) of section 607(f) of such Act
is amended by striking ‘‘or’’ at the end of subpara-
graph (B), by striking the period at the end of sub-
paragraph (C) and inserting ‘‘, or’’, and by inserting
after subparagraph (C) the following new subpara-
graph:
‘‘(D) the payment of the tax imposed by
subsection (n).’’
(c) TREATMENT OF CERTAIN LEASE PAYMENTS.—
(1) Paragraph (1) of section 607(f) of such Act
is amended by striking ‘‘or’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, or’’, and by inserting
after subparagraph (D) the following new subpara-
graph:
‘‘(E) the payment of amounts which reduce
the principal amount (as determined under reg-
ulations) of a qualified lease of a qualified ves-
sel or of a barge or container which is part of
the complement of a qualified vessel.’’
(2) Paragraph (4) of section 607(g) of such Act
is amended by inserting ‘‘(or to reduce the principal
amount of any qualified lease)’’ after ‘‘indebted-
ness’’.
(3) Subsection (k) of section 607 of such Act
is amended by adding at the end thereof the follow-
ing new paragraph:
‘‘(12) The term ‘qualified lease’ means any
lease with a term of at least 5 years.’’
(d) AUTHORITY TO MAKE DEPOSITS
FOR PRIOR
YEARS BASED ON AUDIT ADJUSTMENTS.—Subsection (b)
of section 607 of such Act is amended by adding at the
end thereof the following new paragraph:
‘‘(4) To the extent permitted by joint regula-
tions, deposits may be made in excess of the limita-
tion described in paragraph (1) (and any limitation
specified in the agreement) for the taxable year if,
by reason of an audit adjustment to a prior taxable
year which became final during the taxable year, the
amount of the deposit could have been made for
such prior taxable year.’’
(e) TREATMENT OF CAPITAL GAINS AND LOSSES.—
(1) Paragraph (3) of section 607(e) of such Act
is amended to read as follows:
‘‘(3) The capital gain account shall consist of—