Page:United States Statutes at Large Volume 100 Part 3.djvu/1035

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2843

"(i) IN GENERAL.—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— "(I) the paying company's share determined under section 812 for such taxable year, exceeds "(II) 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 2450t)) (as the case may be) shall be reduced as provided in clause (ii). "(ii) AMOUNT OF REDUCTION.—The reduction under this clause for a dividend is an amount equal to— "(I) the portion of such dividend attributable to prorated amounts, multiplied by "(II) the percentage obtained by subtracting the share described in subclause (II) of clause (i) from the share described in subclause (I) of such clause, "(iii) PRORATED AMOUNTS.—For purposes of this subparagraph, the term 'prorated amounts' means taxexempt interest and dividends other than 100 percent dividends. "(iv) PORTION OF DIVIDEND ATTRIBUTABLE TO PRORATED

AMOUNTS.—For purposes of this subparagraph, in determining the portion of any dividend attributable to prorated amounts— "(I) 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 "(II) by determining the portion of earnings and profits so attributable without any reduction for the tax imposed by this chapter. "(v)

SUBPARAGRAPH TO APPLY TO DIVIDENDS FROM INSURANCE COMPANIES.—Rules similar to the

OTHER 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." (q) SPECIAL RULE FOR APPLICATION OF HIGH SURPLUS MUTUAL

RULES.—In the case of any mutual life insurance company— (1) which was incorporated on February 23, 1888, and (2) which acquired a stock subsidiary during 1982, the amount of such company's excess equity base for purposes of section 809(i) of such Code shall, notwithstanding the last sentence of section 809(i)(2)(D), equal $175,000,000. (r) CLERICAL AMENDMENT.—Paragraph (3) of section 809(f) is amended by striking out "subsection (c)(2)" and inserting in lieu thereof "subsection (c)(1)(B)". (s) AMENDMENTS RELATED TO SECTION 807.—Subparagraph (C) of section 807(d)(5) is amended by adding at the end thereof the following: "When the Secretary by regulation changes the table applicable to a type of contract, the new table shall be treated (for purposes of subparagraph (B) and for purposes of determining the issue dates of contracts for which it shall be used) as if it were a new prevailing

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