Insurance Company Tax Modernization and Parity Act of 2017

Bill: 115-hr-2181
Sponsor: full_name: Rep. Tiberi, Patrick J. [R-OH-12]
Introduced: 2017-04-26
Policy area: Taxation
Subjects: Income tax deductions

Insurance industry and regulation

Life, casualty, property insurance

Securities

Tax administration and collection, taxpayers
Latest action: action_date: 2017-04-26
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2017-04-26
action_desc: Introduced in House
text: <p><b>Insurance Company Tax Modernization and Parity Act of 2017</b></p> <p>This bill amends the Internal Revenue Code to allow affiliated life and non-life insurance companies to file consolidated tax returns. The bill also allows: (1) a phase-in of the full application of losses of affiliated non-life insurance companies against the taxable income of an affiliated life insurance company for taxable years beginning after December 31, 2017, and before January 1, 2024, and (2) an automatic waiver of the five-year waiting period applicable to affiliated non-life insurance companies for offset of their losses against life insurance company income.</p>

tv_txt: I 115th CONGRESS 1st Session H. R. 2181 IN THE HOUSE OF REPRESENTATIVES April 26, 2017 Mr. Tiberi (for himself, Mr. Larson of Connecticut , Mr. Paulsen , and Mr. Reed ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to permit the consolidation of life insurance companies with other companies.

1. Short title This Act may be cited as the Insurance Company Tax Modernization and Parity Act of 2017 . 2. Consolidation of life insurance companies with other companies permitted (a) In general Section 1504(b) of the Internal Revenue Code of 1986 is amended by striking paragraph (2) and by redesignating paragraphs (3) through (8) as paragraphs (2) through (7), respectively. (b) Conforming amendments (1) Section 1503 of the Internal Revenue Code of 1986 is amended by striking subsection (c) and by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively. (2) Section 1504 of such Code is amended by striking subsection (c) and by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively. (3) Section 243(b)(2)(A) of such Code is amended by striking sections 1504(b)(2), 1504(b)(4), and 1504(c) and inserting section 1504(b)(3) . (4) Section 805(a)(4)(E) of such Code is amended by striking 1504(b)(3) and inserting 1504(b)(2) . (5) Section 818(e)(1) of such Code is amended to read as follows: (1) Items of companies other than insurance companies If an affiliated group includes members which are and which are not taxed under section 801, all items of the members of such group which are not taxed under section 801 shall not be taken into account in determining the amount of the tentative LICTI of members of such group which are taxed under section 801. . (6) Section 832(b)(5)(D)(ii)(II) of such Code is amended by striking 1504(b)(3) and inserting 1504(b)(2) . (7) Section 864(e)(5)(A) of such Code is amended by striking paragraph (4) and inserting paragraph (3) . (8) Section 936(i)(5)(A) of such Code is amended by striking section 1504(b)(3) or (4) and inserting section 1504(b)(2) or (3) . (9) Section 952(c)(1)(B)(vii)(II) of such Code is amended by striking 1504(b)(3) and inserting 1504(b)(2) . (10) Section 953(d)(3) of such Code is amended by striking 1503(d) and inserting 1503(c) . (11) Section 954(h)(4)(F)(ii) of such Code is amended by striking 1504(b)(3) and inserting 1504(b)(2) . (12) Section 6166(b)(10)(B)(ii)(V) of such Code is amended by striking 1504(b)(3) and inserting 1504(b)(2) . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017. 3. Phase-in of application of certain losses against income of insurance companies (a) Phase-In (1) In general For taxable years beginning after December 31, 2017, and before January 1, 2024, if— (A) an affiliated group includes one or more domestic insurance companies subject to tax under section 801 of the Internal Revenue Code of 1986; and (B) the consolidated taxable income of the members of the group not taxed under such section 801 results in a consolidated net operating loss for such taxable year, then, under regulations prescribed by the Secretary of the Treasury or his delegate, the amount of such loss (including carryovers from years prior to the effective date of this provision) which cannot be absorbed in the applicable carryback periods against the taxable income of such members not taxed under such section 801 shall be taken into account in determining the consolidated taxable income of the affiliated group for such taxable year to the extent of the applicable percentage of such loss or the applicable percentage of the taxable income of the members taxed under such section 801, whichever is less. The unused portion of such loss shall be available as a carryover, subject to the same limitations (but determined based on the applicable percentage with respect to the year to which carried and applicable to the sum of the loss for the carryover year and the loss (or losses) carried over to such year), in applicable carryover years. (2) Applicable percentage For purposes of paragraph (1), the applicable percentage shall be determined in accordance with the following table: For taxable years The applicable  beginning in: percentage is: 2018 40 2019 50 2020 60 2021 70 2022 80 2023 90. (b) No carryback before January 1, 2018 To the extent that a consolidated net operating loss is allowed or increased by reason of this section or the amendments made by this Act, such loss (or increase in such loss, as the case may be) may not be carried back to a taxable year beginning before January 1, 2018. (c) Nontermination of group No affiliated group shall terminate solely as a result of this section or the amendments made by this Act. (d) Subsidiary stock basis adjustments A member corporation’s basis in the stock of a subsidiary corporation shall be adjusted upon consolidation to reflect the preconsolidation income, gain, deduction, loss, distributions, and other relevant amounts during a period when such corporations were members of an affiliated group (determined without regard to section 1504(b)(2) of the Internal Revenue Code of 1986 as in effect on the day before the date of enactment of this Act) but were not included in a consolidated return of such group by operation of section 1504(c)(2)(A) of such Code (as in effect on the day before the date of the enactment of this Act). (e) Waiver of 5-Year waiting period An automatic waiver from the 5-year waiting period for reconsolidation provided in section 1504(a)(3) of the Internal Revenue Code of 1986 shall be granted to any corporation which was previously an includible corporation but was subsequently deemed a nonincludible corporation as a result of becoming a subsidiary of a corporation which was not an includible corporation solely by operation of section 1504(c)(2) of such Code (as in effect on the day before the date of enactment of this Act), subject to such conditions as the Secretary may prescribe.