Page:United States Statutes at Large Volume 98 Part 1.djvu/788

 98 STAT. 740

Post, p. 741.

PUBLIC LAW 98-369—JULY 18, 1984 respect of net operating loss carrybacks, net operating loss carryovers, and the net operating loss deduction. "(g) TRANSITIONAL RULE.—For purposes of this section and section 812 (as in effect before the enactment of the Life Insurance Tax Act of 1984), this section shall be treated as a continuation of such section 812.

"Subpart D—Accounting, Allocation, and Foreign Provisions "Sec. "Sec. "Sec. "Sec.

26 USC 811.

811. Accounting provisions. 812. Definition of company's share and policyholders' share. 813. Foreign life insurance companies. 814. Contiguous country branches of domestic hfe insurance companies. "Sec. 815. Distributions to shareholders from pre-1984 policyholders surplus account. "SEC. 811. ACCOUNTING PROVISIONS. "(a) METHOD OF ACCOUNTING.—All computations entering into the

determination of the taxes imposed by this part shall be made— "(1) under an accrual method of accounting, or "(2) to the extent permitted under regulations prescribed by the Secretary, under a combination of an accrual method of accounting with any other method permitted by this chapter (other than the cash receipts and disbursements method). To the extent not inconsistent with the preceding sentence or any other provision of this part, all such computations shall be made in a manner consistent with the manner required for purposes of the annual statement approved by the National Association of Insurance Commissioners. "(b) AMORTIZATION OF PREMIUM AND ACCRUAL OF DISCOUNT.—

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"(1) IN GENERAL.—The appropriate items of income, deductions, and adjustments under this part shall be adjusted to reflect the appropriate amortization of premium and the appropriate accrual of discount attributable to the taxable year on bonds, notes, debentures, or other evidences of indebtedness held by a life insurance company. Such amortization and accrual shall be determined— "(A) in accordance with the method regularly employed by such company, if such method is reasonable, and "(B) in all other cases, in accordance with regulations prescribed by the Secretary. "(2) SPECIAL RULES.—

"(A) AMORTIZATION OF BOND PREMIUM.—In the case of any bond (as defined in section 171(d)), the amount of bond premium, and the amortizable bond premium for the taxable year, shall be determined under section 171(b) as if the election set forth in section 171(c) had been made. "(B) CONVERTIBLE EVIDENCE OF INDEBTEDNESS.—In no case shall the amount of premium on a convertible evidence of indebtedness include any amount attributable to the conversion features of the evidence of indebtedness. "(3) EXCEPTION.—No accrual of discount shall be required under paragraph (1) on any bond (as defined in section 171(d)), except in the case of discount which is— "(A) interest to which section 103 applies, or "(B) original issue discount (as defined in section 1232(b)).

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