Page:United States Statutes at Large Volume 56 Part 1.djvu/901

 56 STAT.] 77TH CONG. , 2D SESS.-CH. 619-OCT. 21, 1942 "(B) the amount of the tax imposed under Subchapter E of Chapter 2. "(3) In the case of an interinsurer or reciprocal underwriter, if the corporation surtax net income is over $50,000 a tax com- puted as follows: "(A) Normal Tax. -A normal tax on the normal-tax net income, computed at the rates provided in section 13 or section 14 (b), or 48 per centum of the amount by which the normal-tax net income exceeds $50,000, whichever is the lesser; plus "(B) Surtax.-A surtax on the corporation surtax net income, computed at the rates provided in section 15 (b), or 32 per centum of the amount by which the corporation surtax net income exceeds $50,000, whichever is the lesser. "(4) GRoss AMOUNT RECEIVED OVER $75,000 BUT LESS THAN $125,000.-If the gross amount received during the taxable year from interest, dividends, rents, and premiums (including deposits and assessments) is over $75,000 but less than $125,000, the amount ascertained under paragraph (1), paragraph (2) (A), and para- graph (3) shall be an amount which bears the same proportion to the amount ascertained under such paragraph, computed without reference to this paragraph, as the excess over $75,000 of such gross amount received bears to $50,000. "(5) FOREIGN MUTUAL INSURANCE COMPANIES OTHER THAN LIFE OR MARINE. -In the case of a foreign mutual insurance company (other than a life or marine insurance company), the net income shall be the net income from sources within the United States and the gross amount of income from interest, dividends, rents, and net premiums shall be the amount of such income from sources within the United States. "(6) No UNITED STATES INSURANCE BusINEmS. -Foreign mutual insurance companies (other than a life or marine insurance com- pany) not carrying on an insurance business within the United States shall not be taxable under this section but shall be taxable as other foreign corporations. "(b) DEFINITION OF INCOME, ETC.- In the case of an insurance company subject to the tax imposed by this section- "(1) GROSS INVESTMENT INCOME.- 'Gross investment income' means the gross amount of income during the taxable year from interest, dividends, rents, and gains from sales or exchanges of capital assets to the extent provided in section 117; '(2) NET PREMIUMS.- 'Net premiums' means gross premiums (including deposits and assessments) written or received on insurance contracts during the taxable year less return premiums and premiums paid or incurred for reinsurance. Amounts returned where the amount is not fixed in the insurance contract but depends upon the experience of the company or the discre- tion of the management shall not be included in return premiums but shall be treated as dividends to policyholders under paragraph (3); "(3) DIVIDENDS TO POLICHOLDERB.- 'Dividends to policyhold- ers' means dividends and similar distributions paid or declared to policyholders. The term 'paid or declared' shall be construed according to the method regularly employed in keeping the books of the insurance company; "(4) NET INCOME.- The term 'net income' means the gross investment income less- "(A) Tax-free Interest. -The amount of interest which under section 22 (b) (4) is excluded for the taxable year from gross income; 873 54 Stat. 975. 26T.S.C. 710- 752; Supp. I, 8 710- 743. Post, p. 899. 53 Stat. 7, 8. 26U.S.C.§13; Supp. I, §§ 13, 14 (b). Ante, p. 805. Ante, p. 806. 53 Stat. 50 . 26U.S.C.1117; Bupp. I, 117. Ante, pp. 843, 844, 846,847 . 53 Stat. 10 . 26 U.S. C.. 22 (b) (4). Ante, p. 81L

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