Page:United States Statutes at Large Volume 45 Part 1.djvu/894

 SEV ENTIE TH CONGRESS. SEss. I. C$. 852. 1928 . 843 (2) R ESER VE FUNDS .-An amount equal to the excess, if any, Reserves fTAX s for over the deduction specified in paragraph (1) of this subsection, weekly payment as- of 4 per centum of the mean of the reserve funds required by sessments . law and held at the beginning and end of the taxable year, plus (in case of life insurance companies issuing policies covering life, health, and accident insurance combined in one policy issued on the weekly premium payment plan, continuing for li fe and n ot su bject to ca ncell ation) 4 per centum of the mean of such reserve funds (not required by law) held at the beginning and end of the taxable year, as the C ommis sioner find s to be necessary for the protection of the holders of such policies only (3) DIVIDENDS .-The amount received as dividends (A) from Dividends from do - a domestic corporation other than a corporation entitled to the mestic corporations . benefits of section 251, and other than a corporation organized und er the Chi na Trade Act, 1922, or (B) fro m any foreign From foreign . corporation when it is shown to the satisfaction of the Commis- sioner that more than 50 per centum of the gross income of such foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such divi- dends (or for such part of such period as the foreign corpora- tion has been in existence) was derived from sources within the United States as determined under section 119 ; Ante, p. s2'' (4) RESERVE FOR DIVIDEN DS .-A n amount equal t o 2 per centum P ercentageofreser ves of any sums held at the end of the taxable year as a reserve for for deferred dividends . divid ends (other than divi dends payable during the year fol- lowing the taxable year) the payment of which is deferred for a period of not less than five years from the date of the policy contrac t ; Investment expenses. (5) INVESTMENT EXPENSES. -I nve st men t exp en ses p aid during proviso. the taxable year : Provided, That if any general expenses are in Limitation. part assigned to or included in the investment expenses, the total deduction under this paragraph shall not exceed one-fourth of 1 per centum of the book value of the mean of the invested assets held at the beginning and end of the taxable year ; Real estate taxes. (6) REAL EST ATE EXPE NSES .-Tax es and other expenses paid during the taxable year exclusively upon or with respect to Exceptions . the rea l estate owned by the company, not including taxes assessed against local benefits of a kind tending to increase the val ue of th e proper ty asses sed, and not inc luding a ny amoun t pa id out for new buildings, or for permanent improvements or betterments mad e to increase the value of any property . If tales paid on inter- The deduction allowed by this paragraph shall be allowed in est of shareholder. the case of taxe s im pose d up on a sha reho lder of a co mpan y upon his interest as shareholder, which are paid by the company without reimbursement from the shareholder, but in such cases no deduction shall be allowed the shareholder for the amou nt of such taxes ; Exhaust ion of pr op- (7) DEPR ECIA TION .- A reasonable allowance for the exhauS- erty. Lion, wear and tear of property, including a reasonable allowance for obsolescence ; In terest on debts. (8) I N TE R E S T .--All interest paid or accrued within the taxabl e Exception . yea r on its indebtedness, except on indebtedness incurred or continued to purchase or carry obligations or securities (other tha n obligations of the United States issued aft er September 24, 1917, and originally sub sc rib ed for by the taxpayer) the interest upon which is wholly exempt from taxation under this title ; and mo ney (9) S PE CIF IC EXEMPTION .-I n the case of a domestic life insur- cre el ttss. ance company, the net income of which (computed without the benefit of this paragraph) is $25,000 or less, the sum of $3,000 ; 54835°-29-r'r 1-57

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