26 USC 1354 – Alternative tax election; revocation; termination
(a) In general
A qualifying vessel operator may elect the application of this subchapter.
(b) Time and manner; years for which effective
Terms Used In 26 USC 1354
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- corporation: includes associations, joint-stock companies, and insurance companies. See 26 USC 7701
- person: shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation. See 26 USC 7701
- Secretary: means the Secretary of the Treasury or his delegate. See 26 USC 7701
- taxable year: means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. See 26 USC 7701
- vessel: includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water. See 1 USC 3
An election under this subchapter—
(1) shall be made in such form as prescribed by the Secretary, and
(2) shall be effective for the taxable year for which made and all succeeding taxable years until terminated under subsection (d).
Such election may be effective for any taxable year only if made on or before the due date (including extensions) for filing the corporation‘s return for such taxable year.
(c) Consistent elections by members of controlled groups
An election under subsection (a) by a member of a controlled group shall apply to all qualifying vessel operators that are members of such group.
(d) Termination
(1) By revocation
(A) In general
An election under subsection (a) may be terminated by revocation.
(B) When effective
Except as provided in subparagraph (C)—
(i) a revocation made during the taxable year and on or before the 15th day of the 4th month thereof shall be effective on the 1st day of such taxable year, and
(ii) a revocation made during the taxable year but after such 15th day shall be effective on the 1st day of the following taxable year.
(C) Revocation may specify prospective date
If the revocation specifies a date for revocation which is on or after the day on which the revocation is made, the revocation shall be effective for taxable years beginning on and after the date so specified.
(2) By person ceasing to be qualifying vessel operator
(A) In general
An election under subsection (a) shall be terminated whenever (at any time on or after the 1st day of the 1st taxable year for which the corporation is an electing corporation) such corporation ceases to be a qualifying vessel operator.
(B) When effective
Any termination under this paragraph shall be effective on and after the date of cessation.
(C) Annualization
The Secretary shall prescribe such annualization and other rules as are appropriate in the case of a termination under this paragraph.
(e) Election after termination
If a qualifying vessel operator has made an election under subsection (a) and if such election has been terminated under subsection (d), such operator (and any successor operator) shall not be eligible to make an election under subsection (a) for any taxable year before its 5th taxable year which begins after the 1st taxable year for which such termination is effective, unless the Secretary consents to such election.