Common use of Fund Deposits Clause in Contracts

Fund Deposits. A. In order to carry out the purposes of section 607 of the Act as more specifically set forth in Schedule B of this Agreement, for each of the taxable years covered by this Agreement; 1. The Party shall deposit, in any order, all amounts received from the following: a. Receipts (earnings) from the investment and reinvestment of amounts held in the Fund; and b. Except as shall be specifically exempted from deposit by the Secretary, net proceeds (i) the sale or other disposition (including any mortgage) of any agreement vessel, and/or (ii) any insurance or indemnity attributable to any agreement vessel resulting from total loss whether such loss was determined by compromise, constructively, or by agreement. 2. In addition to the deposits required by section (A) of this Article V, the party may make deposit in any order and amount, but not in excess of the sum of: a. One hundred percent of the taxable income attributable to the operation of the agreement vessels in the fisheries of the United States; b. The amount allowable as a deduction under section 167 of the Internal Revenue Code for such year in respect to the agreement vessels; and/or c. Net proceeds not required to be deposited under section (A) (1) (b) of this Article V from (i) the sale or other disposition (including any mortgage) of any agreement vessel, and/or (ii) any insurance or indemnity attributable to any agreement vessel. In no event may the deposits of taxable income from agreement vessels for any taxable year exceed one hundred percent of the taxable income of the Party for such year. Deposits may be made to the ordinary income, capital gain, and capital accounts from any moneys or funds of the Party, however, the Federal income tax treatment of any deposit shall be that specified under section 607 of the Act. B. Deposits which are determined by subsequent audit to exceed the limitations stated in section (A) of this Article V may be applied as deposits applicable to a subsequent taxable year under this Agreement. In the event that upon subsequent audit it is determined that amounts deposited in the Fund for any taxable year fall below the maximum limitations stated in section (A) of this Article V, additional deposits may be made applicable to such taxable year. X. Xxxxxxxx may be made in the form of mortgages and evidences of indebtedness received in connection with transactions referred to in section (A) of this Article V. D. With respect to any leased vessel covered by this Agreement, the maximum amount which may be deposited by the Party for any taxable year may be increased by the amount allowable to the owner as a deduction under section 167 of the Internal Revenue Code that the owner does not deposit under an Agreement for that year. Such deposits by the Party shall be added to the amount in the capital account as a deposit of depreciation.