78 STAT. ]
PUBLIC LAW 88-571-SEPT. 2, 1964
859
(1) by striking out the heading and inserting in lieu thereof the following: " (f) EEFUND OF INCOME TAX CAUSED BY CABRYBACK O ADJUSTMENT FOR CERTAIN UNUSED DEDUCTIONS.—"; and R (2) by adding at the end thereof the following new paragraph: "(3) ADJUSTMENT FOR CERTAIN UNUSED DEDUCTIONS OF LIFE INSURANCE COMPANIES.—For purposes of subsection (a), if any
overpayment of tax imposed by subtitle A arises by operation of section 815(d)(5) (relating to reduction of policyholders sur^nte.p.ssT. plus account of lite insurance companies for certain unused deductions), such overpayment shall be deemed not to have been made prior to the close of the last taxable year to which the loss described in section 8 1 5 (d)(5)(A) is carried under section 812(b)(2)." ^^-s^--(f) The amendments made by this section shall apply with respect to amounts added to policyholders surplus accounts (within the meaning of section 815(c) of the Internal Revenue Code of 1954) for 26 USC sis. taxable years beginning after December 31, 1958. SEC. 4. (a) Section 815 of the Internal Revenue Code of 1954 (relating to distributions to shareholders) is amended— (1) by striking out the second and third sentences of subsection (a), and (2) by adding at the end thereof the following new subsection: " (f) DISTRIBUTION DEFINED.—For purposes of this section, the term 'distribution' includes any distribution in redemption of stock or in partial or complete liquidation of the corporation, but does not include— "(1) any distribution made by the corporation in its stock or in rights to acquire its stock; "(2) except for purposes of subsection (a)(3) and subsection (e)(2)(B), any distribution in redemption of stock issued before 1958 which at all times on and after the date of issuance and on and before the date of redemption is limited as to dividends and is callable, at the option of the issuer, at a price not in excess of 105 percent of the sum of the issue price and the amount of any contribution to surplus made by the original purchaser at the time of his purchase; or (3) any distribution after December 31, 1963, of the stock of a controlled corporation to which section 355 applies, if such con- esA Stat. l u. trolled corporation is an insurance company subject to the tax ^^ ^^^ ^^^" imposed by section 831 and if— ^^^ ^*^*- ^^^" " (A) control was acquired prior to January 1, 1958, or 26 USC 831. " (B) control has been acquired after December 31, 1957— " (i) in a transaction qualifying as a reorganization under section 3 6 8 (a)(1)(B), if the distributing cor- 26 USC 368. poration has at all times since December 31, 1957, owned stock representing not less than 50 percent of the total combined voting power of all classes of stock entitled to vote, and not less than 50 percent of the value of all classes of stock, of the controlled corporation, or "(ii) solely in exchange for stock of the distributing corporation which stock is immediately exchanged by the controlled corporation in a transaction qualifying as a reorganization under section 368(a)(1)(A) or (C), if the controlled corporation has at all times since its organization been wholly owned by the distributing corporation and the distributing corporation has at all times since December 31, 1957, owned stock representing not less than 50 percent of the total combined voting power of all classes of stock entitled to vote, and
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