Page:United States Statutes at Large Volume 98 Part 1.djvu/773

 PUBLIC LAW 98-369—JULY 18, 1984 rWj|,, ^'

98 STAT. 725

«^^ -^ j^g Q£ ^ ^ypg traditionally carried on by life insurance companies for investment purposes, but only if the carrying on of such activity (other than in the case of real estate) does not constitute the active conduct of a trade or business, or "(ii) it involves the performance of administrative services in connection with plans providing life insurance, pension, or accident and health benefits.

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"(C) LIMITATION ON AMOUNT OF LOSS FROM NONINSURANCE

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BUSINESS WHICH MAY OFFSET INCOME FROM INSURANCE BUSINESS.—In computing the life insurance company taxable income of any life insurance company, any loss from a noninsurance business shall be limited under the principles of section 1503(c). "(d) SPECIAL RULE FOR CONTROLLED GROUPS.— "(1) SPECIAL LIFE INSURANCE COMPANY DEDUCTION AND SMALL LIFE INSURANCE COMPANY DEDUCTION DETERMINED ON CON-

TROLLED GROUP BASIS.—For purposes of subsections (a) and (b)— "(A) all life insurance companies which are members of the same controlled group shall be treated as 1 life insurance company, and !i "(B) any special life insurance company deduction and any small life insurance company deduction determined ^ic with respect to such group shall be allocated among the life insurance companies which are members of such group in proportion to their respective tentative LICTI's.

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"(2) NONLIFE INSURANCE MEMBERS INCLUDED FOR ASSET TEST.—

For purposes of subsection (b)(3), all members of the same controlled group (whether or not life insurance companies) shall be treated as 1 company. "(3) CONTROLLED GROUP.—For purposes of this subsection, the term 'controlled group' means any controlled group of corporations (as defined in section 1563(a)); except that subsections (a)(4) and (b)(2)(D) of section 1563 shall not apply.

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"(4) ELECTION WITH RESPECT TO LOSS FROM OPERATIONS OF MEMBER OF GROUP.—

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"(A) IN GENERAL.—Any life insurance company which is a member of a controlled group may elect to have its loss from operations for any taxable year not taken into account for purposes of determining the amount of the special life insurance company deduction for the life insurance companies which are members of such group and which do not file a consolidated return with such life insurance company for the taxable year.

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NONLiFE INCOME.—In the case of that portion of any loss from operations for any taxable year of a life insurance company which (but for subparagraph (A)) would have reduced tentative LICTI of other life insurance companies for such taxable year— "(i) only 80 percent of such portion may be used to offset nonlife income, and "(ii) to the extent such portion is used to offset nonlife income, the loss shall be treated as used at a rate of $1 for each 80 cents of income so offset. For purposes of the preceding sentence, any such portion shall be used before the remaining portion of the loss from

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"(B) LIMITATION ON AMOUNT OF LOSS WHICH MAY OFFSET

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