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Capital Construction Fund ProgramWhat is the Capital Construction Fund (CCF) Program? It may be the best way to replace your fishing boat. The stated purpose of the CCF Program is to improve the overall fleet of United States fishing vessels by allowing fishermen to set aside funds for replacement or improvement of their boats much quicker than they might otherwise be able to. The program allows fishermen to set aside a portion of their fishing income and capital gains. Subject to certain restrictions, the portion set aside could be 100% of otherwise taxable income. Ordinary income from operating a fishing vessel that is part of a CCF Program agreement can be deposited into a CCF account and income taxes (but not self-employment taxes) are then deferred. Income from capital gain on the sale of an old boat can be deferred by depositing the proceeds into the CCF account (subject to certain restrictions and minimum deposit requirements). The government recovers its "lost revenue" later through reduced depreciation deductions and/or increased capital gains. The CCF Program requires that the taxpayer enter into a formal agreement with the Department of Commerce (under the National Oceanic and Atmospheric Administration, National Marine Fisheries Service). There are a number of detailed reporting requirements, restrictions, and rules and specific information that must be provided in order to enter into an agreement, maintain the agreement, terminate the agreement, and defer income taxes during the life of the agreement. We highly recommend that you contact us or your accountant to discuss the details of the CCF Program if you are considering replacing or significantly improving your boat. |
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