Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 There is enclosed $. for _subscription(s) to the publications checked below: FEDERAL REGISTER $25.00 domestic; 36.00 foreign ($2.50 monthly) CODE OF FEDERAL REGULATIONS $195.00 domestic; $245.00 foreign Title 26-Internal Revenue (This book contains Parts 2 to 29) Part CHAPTER I—Internal Revenue Service, Department of the Treasury (continued) 2 CHAPTER I-INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY 13 Temporary income tax regulations under the Tax Reform Act of 1969. 14 Temporary regulations under Act of April 14, 1966, relating to electing small business corporations. 15 Temporary income tax regulations relating to exploration expenditures in the case of mining. 16 Temporary regulations under the Revenue Act of 1962. 18 Certain income tax matters under the Technical Amendments Act of 1958. 19 Temporary regulations under the Revenue Act of 1964. SUBCHAPTER B-ESTATE AND GIFT TAXES 20 Estate tax; estates of decedents dying after August 16, 1954. 25 Gift tax; gifts made after December 31, 1954. 26-29 [Reserved] Supplementary Publications: Internal Revenue Service Looseleaf Regulations System. Additional supplementary publications are issued covering Alcohol and Tobacco Tax Regulations, and Regulations Under Tax Convention. Election as to nonrecognition of gain. 2.1-13 Deposit of proceeds of sales or indemnities. 2.1-14 Deposit of earnings and receipts. 2.1-15 Time for making deposits. 2.1-16 Tax liability as to earnings deposited. 2.1-17 Basis of new vessel. 2.1-18 Allocation of gain for tax purposes 2.1-19 Requirements as to new vessels. 2.1-20 Obligation of deposits. 2.1-21 Period for construction of certain vessels. 2.1-22 Time extension for expenditure or obligation. 2.1-23 Noncompliance with requirements. 2.1-24 Extent of tax liability. 2.1-25 Assessment and collection of def- 2.1-26 Reports by taxpayers. AUTHORITY: The provisions of this Part 2 issued under sec. 511 (b), 49 Stat. 1985, as amended, sec. 7805, 68A Stat. 917; 26 U.S.C. 7805, 46 U.S.C. 1161 (b). SOURCE: The provisions of this Part 2 contained in Treasury Decision 6820, 30 F.R. 6030, Apr. 29, 1965, unless otherwise noted. NOTE: The regulations contained in this part have been recodified in 46 CFR, Part 287. § 2.1 Statutory provisions; sections 511 and 905, Merchant Marine Act, 1936, and related statutes. Sec. 511. [Merchant Marine Act, 1936.] (a) When used in this section the term "new vessel" means any vessel (1) documented or agreed with the Commission to be documented under the laws of the United States; (2) constructed in the United States after December 31, 1939, or the construction of which has been financed under titles V or VII of this Act, as amended. or the construction of which has been aided by a mortgage insured under title XI of this Act as amended; and (3) either (A) of such type, size, and speed as the Commission shall determine to be suitable for use on the high seas or Great Lakes in carrying out the purposes of this Act, but not of less than 2,000 gross tons or of less speed than twelve knots, unless the Commission shall determine and certify in each case that a vessel of a specified lesser tonnage or speed is desirable for use by the United States in case of war or national emergency, or (B) constructed to replace a vessel or vessels requisitioned or purchased by the United States. (b) For the purposes of promoting the construction, reconstruction, reconditioning, or acquisition of vessels, or for other purposes authorized in this section, necessary to carrying out the policy set forth in title I of this Act, any citizen of the United States who is operating a vessel or vessels in the foreign or domestic commerce of the United States or in the fisheries or owns in whole or in part a vessel or vessels being so operated, or who, at the time of purchase or requisition of the vessel by the Government, was operating a vessel or vessels so engaged or owned in whole or in part a vessel or vessels being so operated or had acquired or was having constructed a vessel or vessels for the purpose of operation in such commerce or in the fisheries, may establish a construction reserve fund, for the construction, reconstruction, reconditioning, or acquisition of new vessels, or for other purposes authorized in this section, to be composed of deposits of proceeds from sales of vessels, indemnities on account of losses of vessels, earnings from the operation of vessels documented under the laws of the United States and from services incident thereto, and receipts, in the form of interest or otherwise, with respect to amounts previously deposited. Such construction reserve fund shall be established, maintained, expended, and used in accordance with the provisions of this section and rules or regulations to be prescribed jointly by the Commission and the Secretary of the Treasury. (c) In the case of the sale or actual or constructive total loss of a vessel, if the taxpayer deposits an amount equal to the net proceeds of the sale or to the net indemnity with respect to the loss in a construction reserve fund established under subsection (b), then (1) If the taxpayer so elects in his incometax return for the taxable year in which the gain was realized, or |