Page:United States Statutes at Large Volume 70.djvu/103

 70 S T A T. ]

PUBLIC LAW 429-MAR. 13, 1956

47

"(b) LiMiTATiox.—This section shall not reduce tTie tax for any taxable year below the amount which (but for this section) would be imposed by section 802 or section 811, as the case may be, computed without the applicable limitation on the reserve and other policy liability deduction contained in section 804(b) or section 812(c). "(c) SFKCIAL Ri'i.E FOR DIVIDENDS RECPHVED.—The reduction referred to in paragraph (1)(B) (ii) and in paragraph (2)(B) of subsection (a) shall be an amount computed under section 804(b) (3), except that, for purposes of such computation, the maximum limitation referred to in section 804(b)(3)(B) (ii) shall be— "(1) in the case of a taxable year with respect to which tax is imposed by section 802, the amount by which (A) the net investment income (reduced by the net investment income allocable to non-life insurance reserves), exceeds (B) the life insurance taxable income (computed without regard to the reduction provided by this subsection); or "(2) in the case of a taxable year with respect to which tax is imposed by section 811, the amount by which (A) the sum of the net investment income and the amount of the adjustment for certain reserves provided in section 813, exceeds (B) the life insurance company taxable income (computed without regard to the reduction provided by this subsection)." SEC. 3. ADJUSTMENTS TO INVESTMENT INCOME OF INSURANCE COMPANIES OTHER THAN LIFE. (a) MFTUAL IxsruAxcE COMPANIES (OTHER T H A N L I F E). — The following provisions of part II of subchapter L of chapter 1 of the Internal Revenue Code of 1054 are hereby amended as follows: of'^il*^*oo^,^2% 26 USC 821-823. (1) r a r a g r a p h (2) oi sectnm 821 (a) is amended b}^ striking out "interest, dividends, rents," and inserting in lieu thereof "the items described in section 822(b) (other than paragraph (1)(D) thereof)". (2) Section 821(c) is amended by striking out "interest, dividends, rents," and inserting in lieu thereof "the items described in section 822(b) (other than paragraph (1)(D) thereof)". (3) Section 822(b) is amended to read as follows: " (b) GROSS INVESTMENT INCOME.—For purposes of subsection (a), the term 'gross investment income' means the sum of the following: "(1) The gross amount of income during the taxable year from— " (A) interest, dividends, rents, and royalties, " (B) the entering into of any lease, mortgage, or other instrument or agreement from which the insurance company derives interest, rents, or royalties, " (C) the alteration or termination of any instrument or agreement described in subparagraph (B), and " (D) gains from sales or exchanges of capital assets to the extent provided in subchapter P (sec. 1201 and following. ^f'^rls^r**,^^?' 26 relating to capital gains and losses). seq. u s e 1201 et "(2) The gross income during the taxable year from any trade or business (other than an insurance business) carried on by the insurance company, or by a partnership of which the insurance company is a partner. I n computing gross income under this paragraph, there shall be excluded any item described in paragraph (1)." (4) Paragraph (3) of section 822(c) is amended to read as follows:

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