Page:United States Statutes at Large Volume 73.djvu/167

 73 S T A T. ]

PUBLIC LAW 86-69-JUNE 25, 1959

129

''Subpart D—Distributions to Shareholders "Sec. 815. Distributions to shareholders. "SEC. 815. DISTRIBUTIONS TO SHAREHOLDERS. "(a^ GENERAL RULE. — For purposes of this section and section 802(b)(3), any distribution to shareholders after December 31, 1958, shall be treated as made— "(1) first out of the shareholders surplus account, to the extent thereof, "(2) then out of the policyholders surplus account, to the extent thereof, and "(3) finally out of other accounts. For purposes of this section, the term 'distribution' includes any distrioution in redemption of stock or in partial or complete liquidation of the corporation, but does not include any distribution made by the corporation in its stock or in rights to acquire its stock, and does not (except for purposes of paragraph (3) and subsection (e)(2)(B)) include any distribution in redemption of stock issued before 1958 which at all times on and after the date of issuance and on and before the date of redemption is limited as to dividends and is callable, at the option of the issuer, at a price not in excess of 105 percent of the sum of the issue price and the amount of any contribution to surplus made by the origmal purchaser at the time of his purchase. "(b)

SHAREHOLDERS SURPLUS ACCOUNT.—

"(1) IN GENERAL.—Each stock life insurance company shall, for purposes of this part, establish and maintain a shareholders surplus account. The amount in such account on January 1, 1958, shall be zero. "(2) ADDITIONS TO ACCOUNT.—The amount added to the shareholders surplus account for any taxable year beginning after December 31, 1957, shall be the amount by which— " (A) the sum of— " (i) the life insurance company taxable income (computed without regard to section 802(b)(3)), "(ii) in the case of a taxable year beginning after December 31, 1958, the amount (if any) by which the net long-term capital gain exceeds the net short-term capital loss, "(iii) the deduction for partially tax-exempt interest provided by section 242 (as modified by section 804(a) IQ\^ "^^ 242-245, (3) J, the deductions for dividends received provided by sections 243, 244, and 245 (as modified by section 809(d) (8)(B)), and the amount of interest excluded from gross income under section 103, and "(iv) the small business deduction provided by section 809(d) (10), exceeds " (B) the taxes imposed for the taxable year by section 802(a), determined without regard to section 802(b)(3). " (3) SUBTRACTIONS rROM ACCOUNT.— " (A) IN GENERAL.—There shall be subtracted from the shareholders surplus account for any taxable year the amount which is treated under this section as distributed out of such account. " (B) DISTRIBUTIONS I N 1958.—There shall be subtracted from the shareholders surplus account (to the extent thereof) for any taxable year beginning in 1958 the amount of distributions to shareholders made during 1958. "(c)

POLICYHOLDERS SURPLUS ACCOUNT.—

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