Page:United States Statutes at Large Volume 98 Part 1.djvu/790

 98 STAT. 742

PUBLIC LAW 98-369—JULY 18, 1984 —f

"(C) the deductible portion of any amount (whether or not a poUcyholder dividend), and not taken into account under subparagraph (A) or (B), credited to— "(i) a poHcyholder's fund under a pension plan contract for employees (other than retired employees), or "(ii) a deferred annuity contract before the annuity starting date. "(3)

Ante, pp. 732, "^33.

Ante, p. 726.

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GROSS INVESTMENT INCOME'S PROPORTIONATE SHARE OF

POLICYHOLDER DIVIDENDS.—For purposes of paragraph (1), the gross investment income's proportionate share of policyholder dividends is— "(A) the deduction for policyholders' dividends determined under sections 808 and 809 for the taxable year, but not including— "(i) the deductible portion of excess interest, "(ii) the deductible portion of policyholder dividends „. on contracts referred to in clauses (i) and (ii) of paragraph (2)(C), and "(iii) the deductible portion of the premium and mortality charge adjustments with respect to contracts paying excess interest for such year, multiplied by "(B) the fraction— "(i) the numerator of which is gross investment income for the taxable year (reduced by the policy interest for such year), and "(ii) the denominator of which is life insurance gross income (including tax-exempt interest) reduced by the excess (if any) of the closing balance for the items described in section 807(c) over the opening balance for such items for the taxable year. "(c) NET INVESTMENT INCOME.—For purposes of this section, the term 'net investment income' means 90 percent of gross investment income. "(d) GROSS INVESTMENT INCOME.—For purposes of this section, the term 'gross investment income' means the sum of the following: "(1) INTEREST, ETC.—The gross amount of income from— "(A) interest (including tax-exempt interest), dividends, rents, and royalties, "(B) the entering into of any lease, mortgage, or other instrument or agreement from which the life insurance company derives interest, rents, or royalties, and "(C) the alteration or termination of any instrument or agreement described in subparagraph (B). "(2) SHORT-TERM CAPITAL GAIN.—The amount (if any) by which the net short-term capital gain exceeds the net long-term capital loss. "(3) TRADE OR BUSINESS INCOME.—The gross income from any trade or business (other than an insurance business) carried on by the life insurance company, or by a partnership of which the life insurance company is a partner. In computing gross income under this paragraph, there shall be excluded any item described in paragraph (1). Except as provided in paragraph (2), in computing gross investment income under this subsection, there shall be excluded any gain from the sale or exchange of a capital asset, and any gain considered as gain from the sale or exchange of a capital asset. ^^

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