Source: https://www.law.cornell.edu/uscode/text/26/812?qt-us_code_tabs=0
Timestamp: 2016-02-13 22:51:34
Document Index: 271161989

Matched Legal Cases: ['§ 812', '§ 812', '§ 812', '§\u202f812', '§\u202f211', '§\u202f1821', '§\u202f10241', '§\u202f1018', '§\u202f2004', '§\u202f1602', '§\u202f1084', '§\u202f205', '§\u202f221', '§\u202f2', '§\u202f3', '§\u202f1', '§\u202f806', '§\u202f1901', '§\u202f207', '§\u202f211', '§\u202f812', '§\u202f2', '§\u202f2', '§\u202f2004', '§\u202f1018', '§\u202f1821', '§\u202f1821', '§\u202f1821', '§\u202f1821', '§\u202f1018']

26 U.S. Code § 812 - Definition of company’s share and policyholders’ share | US Law | LII / Legal Information Institute
U.S. Code › Title 26 › Subtitle A › Chapter 1 › Subchapter L › Part I › Subpart D › § 812 26 U.S. Code § 812 - Definition of company’s share and policyholders’ share
§ 812.
Definition of company’s share and policyholders’ share
(1) Company’s shareFor purposes of section 805(a)(4), the term “company’s share” means, with respect to any taxable year, the percentage obtained by dividing—
the company’s share of the net investment income for the taxable year, by
the net investment income for the taxable year.
(2) Policyholders’ share
For purposes of section 807, the term “policyholders’ share” means, with respect to any taxable year, the excess of 100 percent over the percentage determined under paragraph (1).
(b) Company’s share of net investment income
(1) In generalFor purposes of this section, the company’s share of net investment income is the excess (if any) of—
the net investment income for the taxable year, over
the policy interest, for the taxable year, plus
the gross investment income’s proportionate share of policyholder dividends for the taxable year.
(2) Policy interestFor purposes of this subsection, the term “policy interest” means—
required interest (at the greater of the prevailing State assumed rate or the applicable Federal interest rate) on reserves under section 807(c) (other than paragraph (2) thereof),
the deductible portion of excess interest,
(C) the deductible portion of any amount (whether or not a policyholder dividend), and not taken into account under subparagraph (A) or (B), credited to—
a policyholder’s fund under a pension plan contract for employees (other than retired employees), or
a deferred annuity contract before the annuity starting date, and
interest on amounts left on deposit with the company.
In any case where neither the prevailing State assumed interest rate nor the applicable Federal interest rate is used, another appropriate rate shall be used for purposes of subparagraph (A).
(3) Gross investment income’s proportionate share of policyholder dividendsFor purposes of paragraph (1), the gross investment income’s proportionate share of policyholder dividends is—
(A) the deduction for policyholders’ dividends determined under section 808 for the taxable year, but not including—
the deductible portion of policyholder dividends on contracts referred to in clauses (i) and (ii) of paragraph (2)(C), and
the deductible portion of the premium and mortality charge adjustments with respect to contracts paying excess interest for such year,
(B) the fraction—
the numerator of which is gross investment income for the taxable year (reduced by the policy interest for such year), and
the denominator of which is life insurance gross income reduced by the excess (if any) of the closing balance for the items described in section 807(c) over the opening balance for such items for the taxable year.
For purposes of subparagraph (B)(ii), life insurance gross income shall be determined by including tax-exempt interest and by applying section 807(a)(2)(B) as if it did not contain clause (i) thereof.
(c) Net investment incomeFor purposes of this section, the term “net investment income” means—
except as provided in paragraph (2), 90 percent of gross investment income; or
in the case of gross investment income attributable to assets held in segregated asset accounts under variable contracts, 95 percent of gross investment income.
(d) Gross investment incomeFor purposes of this section, the term “gross investment income” means the sum of the following:
(1) Interest, etc.The gross amount of income from—
interest (including tax-exempt interest), dividends, rents, and royalties,
the entering into of any lease, mortgage, or other instrument or agreement from which the life insurance company derives interest, rents, or royalties,
the alteration or termination of any instrument or agreement described in subparagraph (B), and
the increase for any taxable year in the policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies.
(2) Short-term capital gain
The amount (if any) by which the net short-term capital gain exceeds the net long-term capital loss.
(3) Trade or business income
The gross income from any trade or business (other than an insurance business) carried on by the life insurance company, or by a partnership of which the life insurance company is a partner. In computing gross income under this paragraph, there shall be excluded any item described in paragraph (1).
Except as provided in paragraph (2), in computing gross investment income under this subsection, there shall be excluded any gain from the sale or exchange of a capital asset, and any gain considered as gain from the sale or exchange of a capital asset.
(e) Dividends from certain subsidiaries not included in gross investment income
For purposes of this section, the term “gross investment income” shall not include any dividend received by the life insurance company which is a 100 percent dividend.
(2) 100 percent dividend defined
Except as provided in subparagraphs (B) and (C), the term “100 percent dividend” means any dividend if the percentage used for purposes of determining the deduction allowable under section 243 or 245(b) is 100 percent.
(B) Certain dividends out of tax-exempt interest, etc.
The term “100 percent dividend” does not include any distribution by a corporation to the extent such distribution is out of tax-exempt interest or out of dividends which are not 100 percent dividends (determined with the application of this subparagraph).
(C) Certain dividends received by foreign corporations
The term “100 percent dividends” does not include any dividend described in section 805(a)(4)(E) (relating to certain dividends in the case of foreign corporations).
(f) No double counting
Under regulations, proper adjustments shall be made in the application of this section to prevent an item from being counted more than once.
(Added Pub. L. 98–369, div. A, title II, § 211(a), July 18, 1984, 98 Stat. 741; amended Pub. L. 99–514, title XVIII, § 1821(i), Oct. 22, 1986, 100 Stat. 2840; Pub. L. 100–203, title X, § 10241(b)(2)(B), Dec. 22, 1987, 101 Stat. 1330–420; Pub. L. 100–647, title I, § 1018(h)(1), title II, § 2004(p)(2), Nov. 10, 1988, 102 Stat. 3583, 3608; Pub. L. 104–188, title I, § 1602(b)(2), Aug. 20, 1996, 110 Stat. 1833; Pub. L. 105–34, title X, § 1084(b)(3), Aug. 5, 1997, 111 Stat. 955; Pub. L. 108–218, title II, § 205(b)(4), Apr. 10, 2004, 118 Stat. 610; Pub. L. 113–295, div. A, title II, § 221(a)(41)(G), Dec. 19, 2014, 128 Stat. 4044.)
A prior section 812, added Pub. L. 86–69, § 2(a), June 25, 1959, 73 Stat. 127; amended Pub. L. 87–858, § 3(d)(1), Oct. 23, 1962, 76 Stat. 1137; Pub. L. 88–571, § 1(a), Sept. 2, 1964, 78 Stat. 857; Pub. L. 94–455, title VIII, § 806(d)(1), title XIX, § 1901(a)(99), Oct. 4, 1976, 90 Stat. 1598, 1781; Pub. L. 97–34, title II, § 207(b), Aug. 13, 1981, 95 Stat. 225, related to operations loss deductions, prior to the general revision of this part by Pub. L. 98–369, § 211(a).
Another prior section 812, act Aug. 16, 1954, ch. 736, § 812, as added Mar. 13, 1956, ch. 83, § 2, 70 Stat. 45, related to reserve and other policy liability deduction, prior to the general revision of this part by Pub. L. 86–69, § 2(a).
2014—Subsec. (e)(2)(A). Pub. L. 113–295 struck out “, 244,” after “section 243”.
2004—Subsec. (b)(3)(A). Pub. L. 108–218 substituted “section 808” for “sections 808 and 809”.
1996—Subsec. (g). Pub. L. 104–188 struck out subsec. (g) which read as follows: “Treatment of Interest Partially Tax-Exempt Under Section 133.—For purposes of this section and subsections (a) and (b) of section 807, the terms ‘gross investment income’ and ‘tax-exempt interest’ shall not include any interest received with respect to a securities acquisition loan (as defined in section 133(b)). Such interest shall not be included in life insurance gross income for purposes of subsection (b)(3).”
1988—Subsec. (b)(2). Pub. L. 100–647, § 2004(p)(2), substituted “In any case where neither the prevailing State assumed interest rate nor the applicable Federal interest rate is used, another appropriate rate shall be used for purposes of subparagraph (A).” for “In any case where the prevailing State assumed rate is not used, another appropriate rate shall be treated as the prevailing State assumed rate for purposes of subparagraph (A).”
Subsec. (e). Pub. L. 100–647, § 1018(h)(1), amended subsec. (e) generally. Prior to amendment, subsec. (e) read as follows: “For purposes of this section, the term ‘gross investment income’ shall not include any dividend received by the life insurance company which is a 100-percent dividend (as defined in section 805(a)(4)(C)). Such term also shall not include any dividend described in section 805(a)(4)(D) (relating to certain dividends in the case of foreign corporations).”
1987—Subsec. (b)(2). Pub. L. 100–203 substituted “at the greater of the prevailing State assumed rate or the applicable Federal interest rate” for “at the prevailing State assumed rate or, where such rate is not used, another appropriate rate” in subpar. (A), and inserted provision at end that in any case where the prevailing State assumed rate is not used, another appropriate rate be treated as the prevailing State assumed rate for purposes of subpar. (A).
1986—Subsec. (b)(2). Pub. L. 99–514, § 1821(i)(1), inserted “or, where such rate is not used, another appropriate rate” after “assumed rate”, in subpar. (A) and added subpar. (D).
Subsec. (b)(3)(B). Pub. L. 99–514, § 1821(i)(2), struck out “(including tax-exempt interest)” after “insurance gross income” in cl. (ii) and inserted at end “For purposes of subparagraph (B)(ii), life insurance gross income shall be determined by including tax-exempt interest and by applying section 807(a)(2)(B) as if it did not contain clause (i) thereof.”
Subsec. (c). Pub. L. 99–514, § 1821(i)(3), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “For purposes of this section, the term ‘net investment income’ means 90 percent of gross investment income.”
Subsec. (g). Pub. L. 99–514, § 1821(i)(4), added subsec. (g).
Pub. L. 100–647, title I, § 1018(h)(2), Nov. 10, 1988, 102 Stat. 3583, provided that: “The amendment made by paragraph (1) [amending this section] shall take effect as if included in the amendments made by section 211 of the Tax Reform Act of 1984 [Pub. L. 98–369].”