Page:United States Statutes at Large Volume 45 Part 1.djvu/896

 SEVENTIETH CONGRESS. SEss. I. CH. 852 . 1928 . 845 From the amount of gross premiums written on insurance con • INCOME TAX tract s during the taxable year, deduct return premiums and Computation of. premiums pa id for reinsurance. To the result so obtained add unearned premiums on outstanding business at the end of the preceding taxable year and deduct unearned premiums on out- standing business at the end of the taxable year ; (6) LOSSES INcuRRED.-" Losses incurred " means losses "Lasses incurred ." incurred during the taxable year on insurance contracts, com- puted as follows To losses paid during the taxable year, add salvage and rein- s urance Computation of. recoverable outstanding at the end of the preceding taxa- ble year, and deduct salvage and reinsurance recoverable out- s tand ing at the end of the ta xabl e year. To the result so obtain ed ad d all unpai d los ses ou tstan ding at the end of the t axable year and deduct unpa id lo sses o utsta nding at the end of the preceding taxable year ; "Exp enses incurr ed . ." (7) ExPE NSES iNcunRED." Expenses in cur red" me ans all expenses shown on the annual statement approved by the National Convention of Insurance Commissioners, and shall be c ompute d as follo ws : Comp utation of. To all expenses paid during the taxable year add expenses un paid at the end of the t axable y ear and deduct e xpenses unpaid at the end of the preceding taxable year. For the purpose of computing the net income subject to the tax imposed by this section there shall be deducted from expenses incurred as defined in this paragraph all expenses incurred which are not allowed as deductions by subsection (c) of this section. Net income. (c) Deductions allowed .-In computing the net income of an Deductions allowed. insurance company subject to the tax imposed by this section there shall be allowed as deductions : Business expenses. (1) All ordinary and nec essary e xpenses incurred, as prov ided Ante, pp. 799, 800. in section 23 (a) ; (2) All interest as provided in section 23(b) ; Interest. (3) Taxes as provided in section 23(c) ; Taxes. (4) Losses incurred as defined in subsection (b) (6) of this Losses, section ; (5) Loss es susta ined dur ing the taxable year from the sal e or Lo sses from sales. other disposition of property ; (6) Bad debts in the nature of agency balances and bills worthless debts. receivable ascertained to be worthless and charged off within the taxable year ; Dividends from car- (7) The amount received as dividends from corporations as porations. provided in section 23 (p) (8) The amount of interest earned during the taxable year E xempt intere st. which un der sect ion 22(b ) (4) is exempt from taxa tion und er this title, and the amount of interest allowed as a credit under section 26; Exhaustion, etc., of (9) A reasonable allowance for the exhaustion, wear and tear property. of property, as provided in section 23 (k) S pecif ic mo ney c redit (10) In the case of such a domestic insurance company, the to domestic c ompany. net inco me of wh ich (com pute d wi thou t the be nefi t of thi s paragraph) is $25,000 or less, the sum of $3,000 ; but if the net income is more than $25,000 the tax imposed by this section shall not exceed the tax which would be payable if the $3,000 credit were allowed, plus the amount of the net i ncome in ex cess of $25,000. Foreign corporations. (d) Deducti ons of f oreign c orporati ons .- I n the case of a for- Deductions for e ign co rpora tion the de ducti ons a llowed in t his s ection shal l be u> osa -,at49 business. allowed to the extent provided in Supplement I.

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