Page:United States Statutes at Large Volume 102 Part 4.djvu/485

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3455

(a)), any amount included in gross income under this paragraph shall be treated as gross investment income." (9) Section 831(b) of the 1986 Code is amended by adding at the end thereof the following new paragraph: "(3) LIMITATION ON USE OF NET OPERATING LOSSES.—For purposes of this part, except as provided in section 844, a net operating loss (as defined in section 172) shall not be carried— "(A) to or from any taxable year for which the insurance company is not subject to the tax imposed by subsection (a), or "(B) to any taxable year if, between the taxable year from which such loss is being carried and such taxable year, there is an intervening taxable year for which the insurance company was not subject to the tax imposed by subsection (a)." (g) AMENDMENTS RELATED TO SECTION 1031 OF THE REFORM ACT.—

(1) Paragraph (1) of section 1031(a) of the Reform Act is 26 USC 832 note. amended by inserting "(whether made in a lump sum or a series of substantially equal payments over a period of not more than 6 years)" after "any initial payment". (2) Paragraph (2) of section 1031(a) of the Reform Act is amended by striking out "initial payment" each place it appears and inserting in lieu thereof "initial payment referred to in paragraph (1)". (3) Paragraph (2) of section 1031(a) of the Reform Act is amended by striking out "this title" each place it appears and inserting in lieu thereof "the Internal Revenue Code of 1986". (h) SPECIAL RULE FOR MUTUAL LIFE INSURANCE COMPANY.—

(1) IN GENERAL.—Paragraph (2) of section 217(i) of the Tax Reform Act of 1984 is amended to read as follows: "(2)

EFFECT OF ELECTION ON

26 USC 816 note.

SUBSIDIARIES OF ELECTING

PARENT.—For purposes of determining the amount of the small life insurance company deduction of any controlled group which includes a mutual company which made an election under paragraph (1), the taxable income of such electing company shall be taken into account under section 806(b)(2) of the Internal Revenue Code of 1954 (relating to phaseout of small life insurance company deduction)." (2) EFFECTIVE DATE.—The amendment made by this subsection 26 USC 816 note. shall apply to taxable years beginning after December 31, 1986, and before January 1, 1992. (3) REVENUE LOSS LIMITED.—The decrease in the amount of 26 USC 816 note. Federal revenue by reason of the amendment made by this subsection shall not exceed $300,000 per taxable year, (i) DELAY IN EM^CTIVE DATE FOR DIVERSIFICATION REQUIREMENTS 26 USC 817 note. WITH RESPECT TO ACCOUNTS FOR CERTAIN IMMEDIATE ANNUITIES.—

Section 817(h) of the 1986 Code shall not apply until January 1, 1989 with respect to a variable contract (as defined in section 817(d) of the 1986 Code) if— (1) such contract provides for the payment of an immediate annuity (as defined in section 72(u)(4) of the 1986 Code), (2) such contract was outstanding on September 12, 1986, and (3) the segregated asset account on which such contract is based was, on September 12, 1986, wholly invested in deposits insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.

�