Page:United States Statutes at Large Volume 76.djvu/1046

 998

PUBLIC LAW 87-834-OCT. 16, 1962

Ante. p. 997.

[76 STAT.

Hiutual fire insurance company described in section 831(a)(3) (A). For purposes of the preceding sentence, the term 'dividends and similar distributions' includes amounts returned or credited to policyholders on cancellation or expiration of policies described in section 831(a)(3)(B). For purposes of this paragraph, the term 'paid or declared' shall be construed according to the method of accounting regularly employed in keeping the books of the insurance company; and".

26 USC 832,

(5) ADDITIONAL

ITEM

OF INCOME.—Section

832(b)(1)

is

amended by striking out "and" at the end of subparagraph (B), by striking out the period at the end of subparagraph (C) and inserting in lieu thereof ", and", and by adding at the end thereof the following new subparagraph: " (D) in the case of a mutual fire or flood insurance company described in section 831(a)(3)(B), an amount equal to 2 percent of the premiums earned on insurance contracts during the taxable year with respect to policies described in section 8 3 1 (a)(3)(B) after deduction of premium deposits returned or credited during the same taxable year." (f)

Ante, p. 997.

ELECTION OF CERTAIN MUTUAL COMPANIES To B E TAXED ON

ToTAL INCOME.—Section 831 is amended by redesignating subsection (c) as subsection (d), and by inserting after subsection (b) the following new subsection: " (c) ELECTION FOR MULTIPLE L I N E COMPANY To B E TAXED ON TOTAL INCOME.—

Ante, p. 989.

" (1) IN GENERAL.—Any mutual insurance company engaged in writing marine, fire, and casualty insurance which for any 5-year period beginning after December 31, 1941, and ending before January 1, 1962, was subject to the tax imposed by section 831 (or the tax imposed by corresponding provisions of prior law) may elect, in such manner and at such time as the Secretary or his delegate may by regulations prescribe, to be subject to the tax imposed by section 831, whether or not marine insurance is its predominant source of premium income. "(2) EFFECT OF ELECTION.—If an election is made under paragraph (1), the electing company shall (in lieu of being subject to the tax imposed by section 821) be subject to the tax imposed by this section for taxable years beginning after December 31, 1961. Such election shall not be revoked except with the consent of the Secretary or his delegate." (g)

26 USC 841.

TECHNICAL AMENDMENTS, ETC.— (1) CREDIT FOR FOREIGN TAXES.—Section

841 (relating to credit for foreign taxes) is amended by striking out "and" at the end of paragraph (1), by renumbering paragraph (2) as paragraph (3), and by inserting after paragraph (1) the following new paragraph: "(2) in the case of the tax imposed by section 821(a), the mutual insurance company taxable income (as defined in section 8 2 1 (b)); and in the case of the tax imposed by section 821(c), the taxable investment income (as defined in section 822(a)), and". (2)

26 USC 1016. - ,. ,

^^,,,.,

ADJUSTMENTS TO BASIS FOR DEPRECIATION SUSTAINED.—Sec-

tion 1016(a)(3) (relating to adjustments to basis for depreciation, etc., sustained) is amended by striking out "and" at the end of subparagraph (B), by inserting "and" at the end of subparagraph (C), and by inserting after subparagraph (C) the following new . subparagraph: " (D) since February 28, 1913, during which such property was held by a person subject to tax under part II of subchapter L (or the corresponding provisions of prior income tax laws), to the extent that paragraph (2) does not apply,".

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