Page:United States Statutes at Large Volume 70.djvu/100

 44

PUBLIC LAW 429-MAR. 13, 1956

[70 S T A T.

"(c) REQUIRED INTEREST.—For purposes of subsection (a)(l), the term 'required interest' means the total of— "(1) the sum of the amounts obtained by multiplying— " (A) each rate of interest assumed in computing the taxpayer's life insurance reserves, by " (B) the means of the amounts of the taxpayer's life insurance reserves computed at such rate at the beginning and end of the taxable year, plus 7 percent of the portion of such reserves at such rate as are computed on a preliminary term basis; "(2) the sum of the amounts obtained by multiplying— " (A) each rate of interest assumed in computing the taxpayer's reserves for deferred dividends described in section 804(c)(4), by " (B) the means of the amounts of such reserves computed at such rate at the end of the taxable year; and "(3) interest i^aid. " (d) INTEREST PAID.—For purposes of subsection (c)(3), the term 'interest paid' means— "(1) all interest paid or accrued within the taxable year on indebtedness, except on indebtedness incurred or continued to purchase or carry obligations (other than obligations of the United States issued after September 24, 1917, and originally subscribed for by the taxpayer) the interest on which is wholly exempt from taxation under this chapter; and "(2) all amounts in the nature of interest, whether or not guaranteed, paid or accrued within the taxable year on insurance or annuity contracts (or contracts arising out of insurance or annuity contracts) which do not involve, at the time of payment or accrual, life, health, or accident contingencies. "Subpart B—1942 Formula "Sec. 811. Tax imposed. "Sec. 812. Reserve and other policy liability deduction. "Sec. 813. Adjustment for certain reserves. Post, p. 633.

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"SEC. 811. TAX IMPOSED.

" (a) TAX IMPOSED.—A tax is hereby imposed, on the life insurance company taxable income of every life insurance company, for each taxable year beginning after December 31, 1955. Such tax shall consist of— " (1) a normal tax on such income computed under section 11 (b),and "(2) a surtax on such income computed under section 11(c). " (b) L I F E INSURANCE (^'OMPANY TAXABLE INCOME DEFINED.—For

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purposes of this subpart, the term 'life insurance company taxable income' means the net investment income (as defined in section 803 (c)) — "(1) minus the reserve and other policy liability deduction allowed by section 812, "(2) minus the special interest deduction, if any, allowed by section 805, and " (3) plus the amount of the adjustment for certain reserves provided in section 813. For purposes of the normal tax, the life insurance company taxable income shall be reduced by the deduction provided in section 242 for partially tax-exempt interest.

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