Page:United States Statutes at Large Volume 98 Part 1.djvu/789

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 741

"(c) No DOUBLE COUNTING.—Nothing in this part shall permit— "(1) a reserve to be established for any item unless the gross amount of premiums and other consideration attributable to such item are required to be included in life insurance gross income, "(2) the same item to be counted more than once for reserve purposes, or "(3) any item to be deducted (either directly or as an increase in reserves) more than once. "(d) METHOD OF COMPUTING RESERVES ON CONTRACT WHERE INTEREST Is GUARANTEED BEYOND END OF TAXABLE YEAR.—For purposes

of this part (other than section 816), amounts in the nature of interest to be paid or credited under any contract for any period which is computed at a rate which— "(1) exceeds the prevailing State assumed interest rate for the contract for such period, and "(2) is guaranteed beyond the end of the taxable year on which the reserves are being computed, shall be taken into account in computing the reserves with respect to such contract as if such interest were guaranteed only up to the end of the taxable year. "(e) SHORT TAXABLE YEARS.—If any return of a corporation made under this part is for a period of less than the entire calendar year (referred to in this subsection as 'short period'), then section 443 shall not apply in respect to such period, but life insurance company taxable income shall be determined, under regulations prescribed by the Secretary, on an annual basis by a ratable daily projection of the appropriate figures for the short period.

Post, p. 748. ^J^ "'

"SEC. 812. DEFINITION OF COMPANY'S SHARE AND POLICYHOLDERS' SHARE.

26 USC 812.

i "(a) GENERAL RULE. — "(1) COMPANY'S SHARE.—For

purposes of section 805(a)(4), the term 'company's share' means, with respect to any taxable year, the percentage obtained by dividing— "(A) the company's share of the net investment income for the taxable year, by "(B) the net investment income for the taxable year.

Ante, p. 722.

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"(2) POLICYHOLDERS' SHARE.—For purposes of section 807, the

Ante, p. 726.

t

term 'policyholders' share' means, with respect to any taxable year, the excess of 100 percent over the percentage determined under paragraph (1).

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"(b) COMPANY'S SHARE OF NET INVESTMENT INCOME.—

"(1) IN GENERAL.—For purposes of this section, the company's share of net investment income is the excess (if any) of— "(A) the net investment income for the taxable year, over "(B) the sum of^ "(i) the policy interest, for the taxable year, plus "(ii) the gross investment income's proportionate share of policyholder dividends for the taxable year. "(2) POLICY INTEREST.—For purposes of this subsection, the term 'policy interest' means— "(A) required interest (at the prevailing State assumed rate) on reserves under section 807(c) (other than paragraph (2) thereof), "(B) the deductible portion of excess interest, and

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