Source: http://www.law.cornell.edu/uscode/text/26/805?quicktabs_8=1
Timestamp: 2014-08-20 07:03:04
Document Index: 280391174

Matched Legal Cases: ['§ 805', '§ 805', '§ 805', '§ 211', '§ 611', '§ 805', '§ 1011', '§ 1821', '§ 10221', '§ 1702', '§ 1084', '§ 2', '§ 7', '§ 5', '§ 907', '§ 1016', '§ 1901', '§ 141', '§ 257', '§ 211', '§ 2', '§ 2', '§ 1084', '§ 1084', '§ 1084', '§ 611', '§ 1011', '§ 1821', '§ 805', '§ 1011', '§ 805', '§ 805']

26 U.S. Code § 805 - General deductions | LII / Legal Information Institute
U.S. Code › Title 26 › Subtitle A › Chapter 1 › Subchapter L › Part I › Subpart C › § 805 26 U.S. Code § 805 - General deductions
General rule For purposes of this part, there shall be allowed the following deductions:
Death benefits, etc. All claims and benefits accrued, and all losses incurred (whether or not ascertained), during the taxable year on insurance and annuity contracts.
Increases in certain reserves The net increase in reserves which is required by section 807
(b) to be taken into account under this paragraph.
Policyholder dividends The deduction for policyholder dividends (determined under section 808
Dividends received by company (A)
In general The deductions provided by sections 243, 244, and 245 (as modified by subparagraph (B))—
for 100 percent dividends received, and
for the life insurance company’s share of the dividends (other than 100 percent dividends) received.
Application of section 246(b) In applying section 246
(b) (relating to limitation on aggregate amount of deductions for dividends received) for purposes of subparagraph (A), the limit on the aggregate amount of the deductions allowed by sections 243
(a)(1), 244
(a), and 245 shall be the percentage determined under section 246(b)(3) of the life insurance company taxable income (and such limitation shall be applied as provided in section 246
(b)(3)), computed without regard to—
the small life insurance company deduction,
the operations loss deduction provided by section 810,
the deductions allowed by sections 243
(a), and 245, and
but such limit shall not apply for any taxable year for which there is a loss from operations.
100 percent dividend For purposes of subparagraph (A)—
Except as provided in clause (ii), the term “100 percent dividend” means any dividend if the percentage used for purposes of determining the deduction allowable under section 243, 244, or 245
(b) is 100 percent.
Treatment of dividends from noninsurance companies
The term “100 percent dividend” does not include any distribution by a corporation which is not an insurance company to the extent such distribution is out of tax-exempt interest, or out of the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264
(f) applies, or out of dividends which are not 100 percent dividends (determined with the application of this clause as if it applies to distributions by all corporations including insurance companies).
Special rules for certain dividends from insurance companies (i)
In the case of any 100 percent dividend paid to any life insurance company out of the earnings and profits for any taxable year beginning after December 31, 1983, of another life insurance company if—
the paying company’s share determined under section 812 for such taxable year, exceeds
the receiving company’s share determined under section 812 for its taxable year in which the dividend is received or accrued,
the deduction allowed under section 243, 244, or 245
(b) (as the case may be) shall be reduced as provided in clause (ii).
The reduction under this clause for a dividend is an amount equal to—
the portion of such dividend attributable to prorated amounts, multiplied by
the percentage obtained by subtracting the share described in subclause (II) of clause (i) from the share described in subclause (I) of such clause.
Prorated amounts
For purposes of this subparagraph, the term “prorated amounts” means tax-exempt interest, the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264
(f) applies, and dividends other than 100 percent dividends.
Portion of dividend attributable to prorated amounts
For purposes of this subparagraph, in determining the portion of any dividend attributable to prorated amounts—
any dividend by the paying corporation shall be treated as paid first out of earnings and profits for taxable years beginning after December 31, 1983, attributable to prorated amounts (to the extent thereof), and
by determining the portion of earnings and profits so attributable without any reduction for the tax imposed by this chapter.
Subparagraph to apply to dividends from other insurance companies
Rules similar to the rules of this subsection shall apply in the case of 100 percent dividends paid by an insurance company which is not a life insurance company.
Certain dividends received by foreign corporations Subparagraph (A)(i) (and not subparagraph (A)(ii)) shall apply to any dividend received by a foreign corporation from a domestic corporation which would be a 100 percent dividend if section 1504
(b)(3) did not apply for purposes of applying section 243
Increase in policy cash values For purposes of subparagraphs (C) and (D)—
The increase in the policy cash value for any taxable year with respect to policy or contract is the amount of the increase in the adjusted cash value during such taxable year determined without regard to—
gross premiums paid during such taxable year, and
distributions (other than amounts includible in the policyholder’s gross income) during such taxable year to which section 72
Adjusted cash value
For purposes of clause (i), the term “adjusted cash value” means the cash surrender value of the policy or contract increased by the sum of—
commissions payable with respect to such policy or contract for the taxable year, and
asset management fees, surrender charges, mortality and expense charges, and any other fees or charges specified in regulations prescribed by the Secretary which are imposed (or which would be imposed were the policy or contract canceled) with respect to such policy or contract for the taxable year.
Operations loss deduction The operations loss deduction (determined under section 810).
Assumption by another person of liabilities under insurance, etc., contracts The consideration (other than consideration arising out of indemnity reinsurance) in respect of the assumption by another person of liabilities under insurance and annuity contracts.
Reimbursable dividends The amount of policyholder dividends which—
are paid or accrued by another insurance company in respect of policies the taxpayer has reinsured, and
are reimbursable by the taxpayer under the terms of the reinsurance contract.
Other deductions Subject to the modifications provided by subsection (b), all other deductions allowed under this subtitle for purposes of computing taxable income.
Except as provided in paragraph (3), no amount shall be allowed as a deduction under this part in respect of policyholder dividends.
Modifications The modifications referred to in subsection (a)(8) are as follows:
Interest In applying section 163 (relating to deduction for interest), no deduction shall be allowed for interest in respect of items described in section 807
Charitable, etc., contributions and gifts In applying section 170—
the limit on the total deductions under such section provided by section 170
(b)(2) shall be 10 percent of the life insurance company taxable income computed without regard to—
the deduction provided by section 170,
the deductions provided by paragraphs (3) and (4) of subsection (a),
any operations loss carryback to the taxable year under section 810, and
under regulations prescribed by the Secretary, a rule similar to the rule contained in section 170
(d)(2)(B) (relating to special rule for net operating loss carryovers) shall be applied.
Amortizable bond premium (A)
In general Section 171 shall not apply.
Cross reference For rules relating to amortizable bond premium, see section 811
Net operating loss deduction Except as provided by section 844, the deduction for net operating losses provided in section 172 shall not be allowed.
Dividends received deduction Except as provided in subsection (a)(4), the deductions for dividends received provided by sections 243, 244, and 245 shall not be allowed.
(Added Pub. L. 98–369, div. A, title II, § 211(a),July 18, 1984, 98 Stat. 722; amended Pub. L. 99–514, title VI, § 611(a)(5), title VIII, § 805(c)(6), title X, § 1011(b)(4), title XVIII, § 1821(p),Oct. 22, 1986, 100 Stat. 2249, 2362, 2389, 2842; Pub. L. 100–203, title X, § 10221(c)(2),Dec. 22, 1987, 101 Stat. 1330–409; Pub. L. 104–188, title I, § 1702(h)(3),Aug. 20, 1996, 110 Stat. 1873; Pub. L. 105–34, title X, § 1084(b)(1),Aug. 5, 1997, 111 Stat. 954.)
Another section 1084(b) ofPub. L. 105–34amended sections 101 and 264 of this title.
A prior section 805, added Pub. L. 86–69, § 2(a),June 25, 1959, 73 Stat. 118; amended Pub. L. 87–792, § 7(g),Oct. 10, 1962, 76 Stat. 829; Pub. L. 88–571, § 5(a),Sept. 2, 1964, 78 Stat. 860; Pub. L. 91–172, title IX, § 907(a)(1),Dec. 30, 1969, 83 Stat. 715; Pub. L. 93–406, title II, §§ 1016(a)(6), 2002
(g)(9), 2004(c)(3),Sept. 2, 1974, 88 Stat. 929, 970, 986; Pub. L. 94–267, § (1)(c)(4),Apr. 15, 1976, 90 Stat. 367; Pub. L. 94–455, title XIX, § 1901(a)(97),Oct. 4, 1976, 90 Stat. 1780; Pub. L. 95–600, title I, §§ 141(f)(9), 155(a),Nov. 6, 1978, 92 Stat. 2795, 2801; Pub. L. 97–248, title II, §§ 257(a), 260(b), 261, 264
(a)–(c)(1), Sept. 3, 1982, 96 Stat. 537, 540, 543, 544, related to policy and other contract liability requirements, prior to general revision of this part by Pub. L. 98–369, § 211(a).
Another prior section 805, acts Aug. 16, 1954, ch. 736, 68A Stat. 258; Mar. 13, 1956, ch. 83, § 2,70 Stat. 43, authorized a special interest deduction, prior to the general revision of this part by Pub. L. 86–69, § 2(a).
1997—Subsec. (a)(4)(C)(ii). Pub. L. 105–34, § 1084(b)(1)(A), inserted “, or out of the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264
(f) applies,” after “tax-exempt interest”.
Subsec. (a)(4)(D)(iii). Pub. L. 105–34, § 1084(b)(1)(B), substituted “, the increase for the taxable year in policy cash values (within the meaning of subparagraph (F)) of life insurance policies and annuity and endowment contracts to which section 264
(f) applies, and” for “and”.
Subsec. (a)(4)(F). Pub. L. 105–34, § 1084(b)(1)(C), added subpar. (F).
1996—Subsec. (a)(4)(E). Pub. L. 104–188substituted “243(b)(2)” for “243(b)(5)”.
1987—Subsec. (a)(4)(B). Pub. L. 100–203substituted “shall be the percentage determined under section 246(b)(3) of the life insurance company taxable income (and such limitation shall be applied as provided in section 246
(b)(3))” for “shall be 80 percent of the life insurance company taxable income”.
1986—Subsec. (a)(4)(B). Pub. L. 99–514, § 611(a)(5), substituted “80 percent” for “85 percent” in introductory provisions.
Subsec. (a)(4)(B)(i). Pub. L. 99–514, § 1011(b)(4), struck out “the special life insurance company deduction and” before “the small life”.
Subsec. (a)(4)(C) to (E). Pub. L. 99–514, § 1821(p), added subpars. (C) and (D), redesignated former subpar. (D) as (E), and struck out former subpar. (C) which read as follows: “For purposes of subparagraph (A), the term ‘100 percent dividend’ means any dividend if the percentage used for purposes of determining the deduction allowable under section 243 or 244 is 100 percent. Such term does not include any dividend to the extent it is a distribution out of tax-exempt interest or out of dividends which are not 100 percent dividends (determined with the application of this sentence).”
Subsec. (b)(2). Pub. L. 99–514, § 805(c)(6), redesignated par. (3) as (2). Former par. (2), which provided that section 166
(c) (relating to reserve for bad debts) shall not apply, was struck out.
Subsec. (b)(2)(A)(iii). Pub. L. 99–514, § 1011(b)(4), which directed that subsec. (b)(3)(A)(iii) be amended by striking out “the special life insurance company deduction and” before “the small life”, was executed to subsec. (b)(2)(A)(iii) to reflect the probable intent of Congress and the redesignation of subsec. (b)(3) as (b)(2) by Pub. L. 99–514, § 805(c)(6).
Subsec. (b)(3) to (6). Pub. L. 99–514, § 805(c)(6), redesignated pars. (3) to (6) as (2) to (5), respectively.
Amendment by Pub. L. 105–34applicable to contracts issued after June 8, 1997, in taxable years ending after such date, with special provisions relating to changes in contracts to be treated as new contracts, see section 1084(d) ofPub. L. 105–34, set out as a note under section 101 of this title.
Amendment by Pub. L. 100–203applicable to taxable years beginning after Dec. 31, 1987, see section 10221(e)(2) ofPub. L. 100–203, as amended, set out as a note under section 243 of this title.
Amendment by section 611(a)(5) ofPub. L. 99–514applicable to dividends received or accrued after Dec. 31, 1986, in taxable years ending after such date, see section 611(b)(1) ofPub. L. 99–514, set out as a note under section 246 of this title.
Amendment by section 805(c)(6) ofPub. L. 99–514applicable to taxable years beginning after Dec. 31, 1986, with certain changes required in method of accounting, see section 805(d) ofPub. L. 99–514, set out as a note under section 166 of this title.
Amendment by section 1011(b)(4) ofPub. L. 99–514applicable to taxable years beginning after Dec. 31, 1986, see section 1011(c)(1) ofPub. L. 99–514, set out as a note under section 453B of this title.
Amendment by section 1821(p) ofPub. L. 99–514effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 ofPub. L. 99–514, set out as a note under section 48 of this title.