Page:United States Statutes at Large Volume 98 Part 1.djvu/792

 98 STAT. 744

PUBLIC LAW 98-369—JULY 18, 1984 Ml 0

Post, p. 748. Ante, p. 726.


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over the total insurance liabilities on United States business. "(B) TOTAL INSURANCE LIABILITIES.—For purposes of this subsection, the term 'total insurance liabilities' means the sum of the total reserves (as defined in section 816(c)) plus " (to the extent not included in total reserves) the items referred to in paragraphs (3), (4), (5), and (6) of section 807(c). "(5) REDUCTION OF SECTION 881 TAXES.—In the case of any foreign company taxable under this part, there shall be determined— "(A) the amount which would be subject to taxes under section 881 if the amount taxable under such section were 8l m determined without regard to sections 103 and 894, and "(B) the amount of the increase provided by paragraph The tax under section 881 (determined without regard to this paragraph) shall be reduced (but not below zero) by an amount which is the same proportion of such tax as the amount referred to in subparagraph (B) is of the amount referred to in subparagraph (A); but such reduction in taxes shall not exceed the increase in taxes under this part by reason of the increase provided by paragraph (1). "(b) ADJUSTMENT TO LIMITATION ON DEDUCTION FOR POLICYHOLDER DIVIDENDS IN THE CASE OF FOREIGN MUTUAL LIFE INSURANCE COMPA-

Ante, p. 733.

NiES.—For purposes of section 809, the equity base of any foreign mutual life insurance company as of the close of any taxable year shall be increased by the amount of any excess determined under paragraph (1) of subsection (a) with respect to such taxable year. "(c) CROSS REFERENCE.—

"For taxation of foreign corporations carrying on life insurance business within the United States, see section 842. 26 USC 814.

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"SEC. 814. CONTIGUOUS COUNTRY BRANCHES OF DOMESTIC LIFE INSURANCE COMPANIES. "(a) EXCLUSION OF ITEMS.—In the case of a domestic mutual

insurance company which— "(1) is a life insurance company, "(2) has a contiguous country life insurance branch, and "(3) makes the election provided by subsection (g) with respect to such branch, there shall be excluded from each item involved in the determination of life insurance company taxable income the items separately accounted for in accordance with subsection (c). "(b) CONTIGUOUS COUNTRY LIFE INSURANCE BRANCH.—For purposes of this section, the term contiguous country life insurance branch means a branch which— "(1) issues insurance contracts insuring risks in connection with the lives or health of residents of a country which is contiguous to the United States, "(2) has its principal place of business in such contiguous country, and "(3) would constitute a mutual life insurance company if such branch were a separate domestic insurance company. For purposes of this section, the term 'insurance contract' means any life, health, accident, or annuity contract or reinsurance contract or any contract relating thereto.

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