Page:United States Statutes at Large Volume 73.djvu/161

 78 S T A T. ] "(7)

PUBLIC LAW 86-69-JUNE 26, 1969

128

ASSUMPTION BY ANOTHER PERSON OP LIABILITIES UNDER

INSURANCE, ETC., CONTRACTS.—The Consideration (other than consideration arising out of reinsurance ceded) in respect of the assumption by another person of liabilities under insurance and annuity contracts (including contracts supplementary thereto). "(8)

TAX-EXEMPT INTEREST, DIVIDENDS, ETC.— "(A) Lii*E INSURANCE COMPANY'S SHARE.—Each of

the fol-

lowing items: "(i) the life insurance company's share of interest which under section 103 is excluded from gross income, "(ii) the deduction for partially tax-exempt interest provided by section 242 (as modified by section 804(a) (3)) computed with respect to the life insurance company's share of such interest, and "(iii]) the deductions for dividends received-provided by sections 243, 244, and 245 (as modified by subparagraph (B)) computed with respect to the life insurance company's share of the dividends received. "(B) APPLICATION OF SECTION 246(b).—In applying section 246(b) (relating to limitation on aggregate amount of deductions for dividends received) for purposes of subaragraph (A) (iii), the limit on the aggregate amount of the eductions allowed b^ sections 243(a), 244, and 245 shall be 86 percent of the gain from operations computed without regard to— "(i) the deductions provided by paragraphs (3), (5), and (^6) of this subsection, "(ii) the operations loss deduction provided by section 812, and "(iii) the deductions allowed by sections 243(a), 244, and 245, but such limit shall not apply for any taxable year for which there is a loss from operations. "(9) INVESTMENT EXPENSES, ETC.—Investment expenses to the extent not allowed as a deduction under section 804(c)(1) in computing investment yield, and the amount (if any) by which the sum of the deductions allowable under section 804(c) exceeds the gross investment income. "(10) SMALL BUSINESS DEDUCTION.—^A small business deduction in an amount equal to the amount determined under section 804(a)(4). "(11) CERTAIN MUTUALIZATION DISTRIBUTIONS.—The amount of distributions to shareholders made in 1958 and 1959 in acquisition of stock pursuant to a plan of mutualization adopted before January 1, 1968. "(12) OTHER DEDUCTIONS.—Subject to the modifications provided ay subsection (e), all other deductions allowed under this subtitle for purposes of computing taxable income to the extent not allowed as deductions in computing investment yield. Except as provided in paragraph (8), no amount shall be allowed as a deduction under this subsection in respect of dividends to policyholders. "(e) MoDiFioATioNs.—The modifications referred to in subsection ) (d)(12) are as follows: ^(1) INTEREST.—In applying section 168 (relating to deduction for interest), no deduction shall be allowed tor interest in respect of items described in section 810(c).

S

32716 O-60—11

^ ^ ^ ''"• ® 26 USC 242.

26 USC 243-245.

26 USC 246. 26 USC 243-245.

26 USC 243-245.

26 USC 163.

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