Page:United States Statutes at Large Volume 98 Part 1.djvu/780

 98 STAT. 732

Ante, p. 722.

Ante, p. 721.

PUBLIC LAW 98-369—JULY 18, 1984 as is attributable to contracts issued before the taxable year shall be taken into account under the method provided in subparagraph (B). "(B) METHOD.—The method provided in this subparagraph is as follows: "(i) if the amount determined under subparagraph (A)(i) exceeds the amount determined under subparagraph (A)(ii), Vio of such excess shall be taken into account, for each of the succeeding 10 taxable years, as a deduction under section 805(a)(2); or "(ii) if the amount determined under subparagraph (A)(ii) exceeds the amount determined under subparagraph (A)(i), Vio of such excess shall be included in gross income, for each of the 10 succeeding taxable years, under section 803(a)(2). "(2) TERMINATION AS U F E INSURANCE COMPANY.—Except as

provided in section 381(c)(22) (relating to carryovers in certain corporate readjustments), if for any taxable year the taxpayer is not a life insurance company, the balance of any adjustments under this subsection shall be taken into account for the preceding taxable year. 26 USC 808.

"SEC. 808. POLICYHOLDER DIVIDENDS DEDUCTION.

"(a) POLICYHOLDER DIVIDEND DEFINED.—For purposes of this part, the term 'policyholder dividend' means any dividend or similar distribution to policyholders in their capacity as such. "(b) CERTAIN AMOUNTS INCLUDED.—For purposes of this part, the term 'policyholder dividend' includes— "(1) any amount paid or credited (including as an increase in benefits) where the amount is not fixed in the contract but depends on the experience of the company or the discretion of the management, "(2) excess interest, "(3) premium adjustments, and "(4) experience-rated refunds. "(c) AMOUNT OF DEDUCTION.—

Post, p. 733.

"(1) IN GENERAL.—Except as limited by paragraph (2), the deduction for policyholder dividends for any taxable year shall be an amount equal to the policyholder dividends paid or accrued during the taxable year. "(2) REDUCTION IN CASE OF MUTUAL COMPANIES.—In the case of a mutual life insurance company, the deduction for policyholder dividends for any taxable year shall be reduced by the amount determined under section 809. "(d) DEFINITIONS.—For purposes of this section— "(1) EXCESS INTEREST.—The term 'excess interest' means any amount in the nature of interest— "(A) paid or credited to a policyholder in his capacity as such, and "(B) determined at a rate in excess of the prevailing State assumed interest rate for such contract. "(2) PREMIUM ADJUSTMENT.—The term 'premium adjustment' means any reduction in the premium under an insurance or annuity contract which (but for the reduction) would have been required to be paid under the contract.

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