Qualified investments at December 31, 1975 | $16,000 |
Qualified investments at December 31, 1976 | 17,000 |
Qualified investments at December 31, 1977 | 23,000 |
Qualified investments at December 31, 1978 | 28,000 |
Qualified investments at December 31, 1979 | 30,000 |
Increase for 1976 ($23,000 minus $16,000) | $7,000 |
Increase for 1977 ($28,000 minus $23,000) | 5,000 |
Increase for 1978 ($30,000 minus $28,000) | 2,000 |
Assume the same facts as in example 1, except that M never files an election under § 1.955A-4(b)(1) . X's increases for 1976 through 1978 in qualified investments in foreign base company shipping operations are as follows:
Increase for 1976 ($17,000 minus $16,000) | $1,000 |
Increase for 1977 ($23,000 minus $17,000) | 6,000 |
Increase for 1978 ($28,000 minus $23,000) | 5,000 |
The facts are the same as in example 1, except that X's qualified investments in foreign base company shipping operations include an investment in less developed country shipping companies described in § 1.955-5(b) of $500 on December 31, 1975, and $750 on December 31, 1976. Assume further that M has made an election under section 955(b)(3) (as in effect before the enactment of the Tax Reduction Act of 1975) with respect to X's taxable year 1975. Then X's increase in qualified investments in foreign base company shipping operations for 1976 is $6,750 (i.e., $7,000-$250).
Example.
Cash | $6,000 |
Readily marketable securities | 1,000 |
Stock of related controlled foreign corporations | 4,000 |
Traffic and other receivables | 14,000 |
Marine insurance claims receivables | 1,000 |
Foreign income tax refunds receivable | 1,000 |
Prepaid shipping expenses and shipping inventories ashore | 1,000 |
Vessel construction funds | 0 |
Vessels | 123,000 |
Vessel plans and construction in progress | 3,000 |
Containers and chassis | 0 |
Terminal property and equipment | 2,000 |
Shipping office (land and building) | 1,000 |
Vessel spare parts ashore | 1,000 |
Performance deposits | 2,000 |
Deferred charges | 2,000 |
Stock of less developed country shipping company described in § 1-955-5(b) | 10,000 |
172,000 |
Cash | $5,000 |
Readily marketable securities | 2,000 |
Stock of related controlled foreign corporations | 4,000 |
Traffic and other receivables | 16,000 |
Foreign income tax refunds receivable | 3,000 |
Prepaid shipping expenses and shipping inventories ashore | 2,000 |
Vessel construction funds | 1,000 |
Vessels | 117,000 |
Vessel plans and construction in progress | 12,000 |
Containers and chassis | 4,000 |
Terminal property and equipment | 2,000 |
Shipping office (land and building) | 1,000 |
Vessel spare parts ashore | 1,000 |
Performance deposits | 2,000 |
Deferred charges | 2,000 |
Stock of less developed country shipping company described in § 1.955-5(b) | 0 |
174,000 |
Qualified investments at Dec. 31, 1976 | $174,000 |
Qualified investments at Dec. 31, 1975 | 172,000 |
Increase for 1976 | 2,000 |
26 C.F.R. §1.954-7