Source: https://www.law.cornell.edu/uscode/text/26/842
Timestamp: 2019-05-23 19:50:14
Document Index: 116438089

Matched Legal Cases: ['§ 842', '§\u202f842', '§\u202f5', '§\u202f3', '§\u202f104', '§\u202f1024', '§\u202f10242', '§\u202f2004', '§\u202f7821', '§\u202f205', '§\u202f13512', '§\u202f2004', '§\u202f2004', '§\u202f2004', '§\u202f1244']

26 U.S. Code § 842 - Foreign companies carrying on insurance business | U.S. Code | US Law | LII / Legal Information Institute
Part III. PROVISIONS OF GENERAL APPLICATION
Section 842. Foreign companies carrying on insurance business
26 U.S. Code § 842. Foreign companies carrying on insurance business
(1) In generalIn the case of a foreign company taxable under part I or II of this subchapter for the taxable year, its net investment income for such year which is effectively connected with the conduct of an insurance business within the United States shall be not less than the product of—
(A) In generalFor purposes of paragraph (1), the required United States assets of any foreign company for any taxable year is an amount equal to the product of—
the mean of such foreign company’s total insurance liabilities on United States business, and
(B) Total insurance liabilitiesFor purposes of this paragraph—
(C) Domestic asset/liability percentageThe domestic asset/liability percentage applicable for purposes of subparagraph (A)(ii) to any foreign company for any taxable year is a percentage determined by the Secretary on the basis of a ratio—
(3) Domestic investment yieldThe domestic investment yield applicable for purposes of paragraph (1)(B) to any foreign company for any taxable year is the percentage determined by the Secretary on the basis of a ratio—
If the foreign company makes an election under this paragraph, such company’s worldwide current investment yield shall be taken into account in lieu of the domestic investment yield for purposes of paragraph (1)(B).
(B) Worldwide current investment yieldFor purposes of subparagraph (A), the term “worldwide current investment yield” means the percentage obtained by dividing—
(5) Net investment incomeFor purposes of this subsection, the term “net investment income” means—
grossinvestment income (within the meaning of section 834(b)), reduced by
(A) In generalThe tax under section 881 (determined without regard to this paragraph) shall be reduced (but not below zero) by an amount which bears the same ratio to such tax as—
(d) RegulationsThe Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations—
providing for proper adjustments in succeeding taxable years where the company’s actual net investment income for any taxable year which is effectively connected with the conduct of an insurance business within the United States exceeds the amount required under subsection (b)(1),
(Aug. 16, 1954, ch. 736, 68A Stat. 267; Mar. 13, 1956, ch. 83, § 5(5), 70 Stat. 49; Pub. L. 86–69, § 3(f)(1), June 25, 1959, 73 Stat. 140; Pub. L. 89–809, title I, § 104(i)(1), Nov. 13, 1966, 80 Stat. 1561; Pub. L. 99–514, title X, § 1024(c)(11), Oct. 22, 1986, 100 Stat. 2408; Pub. L. 100–203, title X, § 10242(a), Dec. 22, 1987, 101 Stat. 1330–420; Pub. L. 100–647, title II, § 2004(q)(2), (3), Nov. 10, 1988, 102 Stat. 3609; Pub. L. 101–239, title VII, § 7821(d)(2), Dec. 19, 1989, 103 Stat. 2424; Pub. L. 108–218, title II, § 205(b)(6), Apr. 10, 2004, 118 Stat. 610; Pub. L. 115–97, title I, § 13512(b)(7), Dec. 22, 2017, 131 Stat. 2143.)
2017—Subsec. (c). Pub. L. 115–97 redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1). Prior to amendment, text of par. (1) read as follows: “In the case of a foreign company taxable under part I, subsection (b) shall be applied before computing the small life insurance company deduction.”
2004—Subsec. (c)(3), (4). Pub. L. 108–218 redesignated par. (4) as (3) and struck out heading and text of former par. (3). Text read as follows: “For purposes of section 809, the equity base of any foreign mutual life insurance company as of the close of any taxable year shall be increased by the excess of—
“(A) the required United States assets of the company (determined under subsection (b)(2)), over
“(B) the mean of the assets held in the United States during the taxable year.”
1989—Subsec. (c)(4). Pub. L. 101–239 substituted “yields” for “yeilds” in heading.
1988—Subsec. (b)(3)(B). Pub. L. 100–647, § 2004(q)(2)(A), struck out “held for the production of such income” after “same companies”.
Subsec. (b)(4)(B)(ii). Pub. L. 100–647, § 2004(q)(2)(B), struck out “held for the production of investment income” after “United States)”.
Subsec. (d)(4). Pub. L. 100–647, § 2004(q)(3), added par. (4).
1987—Pub. L. 100–203 substituted “companies” for “corporations” in section catchline and amended text generally. Prior to amendment, text read as follows: “If a foreign corporation carrying on an insurance business within the United States would qualify under part I or II of this subchapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation, such corporation shall be taxable under such part on its income effectively connected with its conduct of any trade or business within the United States. With respect to the remainder of its income, which is from sources within the United States, such a foreign corporation shall be taxable as provided in section 881.”
1986—Pub. L. 99–514 struck out reference to part III of this subchapter.
1966—Pub. L. 89–809 substituted provisions covering the taxability of foreign corporations that are carrying on an insurance business within the United States which would qualify under part I, II, or III of this subchapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation for provisions that the gross income of insurance companies subject to the tax imposed by section 802 or 831 shall not be determined in the manner provided in part I of subchapter N (relating to determination of sources of income).
1959—Pub. L. 86–69 struck out reference to section 811.
Pub. L. 99–514, title XII, § 1244, Oct. 22, 1986, 100 Stat. 2581, directed Secretary of the Treasury or his delegate to conduct a study to determine whether United States reinsurance corporations are placed at a significant competitive disadvantage with foreign reinsurance corporations by existing treaties between the United States and foreign countries, and to report before Jan. 1, 1988, the results of such study to Committee on Finance of United States Senate and Committee on Ways and Means of House of Representatives.