26 USC § 1358 - Allocation of credits, income, and deductions

---
identifier: "/us/usc/t26/s1358"
source: "usc"
legal_status: "official_prima_facie"
title: "26 USC § 1358 - Allocation of credits, income, and deductions"
title_number: 26
title_name: "INTERNAL REVENUE CODE"
section_number: "1358"
section_name: "Allocation of credits, income, and deductions"
chapter_number: 1
chapter_name: "NORMAL TAXES AND SURTAXES"
subchapter_number: "R"
subchapter_name: "Election To Determine Corporate Tax on Certain International Shipping Activities Using Per Ton Rate"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Added Pub. L. 108–357, title II, § 248(a), Oct. 22, 2004, 118 Stat. 1456; amended Pub. L. 115–141, div. U, title IV, § 401(a)(188), (189), Mar. 23, 2018, 132 Stat. 1193.)"
---


# § 1358. Allocation of credits, income, and deductions

**(a)** **Qualifying shipping activities** For purposes of this chapter, the qualifying shipping activities of an electing corporation shall be treated as a separate trade or business activity distinct from all other activities conducted by such corporation.

**(b)** **Exclusion of credits or deductions**

**(1)** No deduction shall be allowed against the notional shipping income of an electing corporation, and no credit shall be allowed against the tax imposed by section 1352(2).

**(2)** No deduction shall be allowed for any net operating loss attributable to the qualifying shipping activities of any person to the extent that such loss is carried forward by such person from a taxable year preceding the first taxable year for which such person was an electing corporation.

**(c)** **Transactions not at arm’s length** Section 482 applies in accordance with this subsection to a transaction or series of transactions—

**(1)** as between an electing corporation and another person, or

**(2)** as between a person’s qualifying shipping activities and other activities carried on by it.

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**Source Credit**: (Added Pub. L. 108–357, title II, § 248(a), Oct. 22, 2004, 118 Stat. 1456; amended Pub. L. 115–141, div. U, title IV, § 401(a)(188), (189), Mar. 23, 2018, 132 Stat. 1193.)

## Editorial Notes

### Amendments

2018—Subsec. (b)(1). , substituted “section 1352(2)” for “section 1352(a)(2)”.

Subsec. (c)(2). , substituted “a person’s” for “an person’s”.

## Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to taxable years beginning after , see , set out as an Effective Date of 2004 Amendments note under .