844 INCOME TAX Rental value of real estate . Deductions limited . Foreign life insurance companies . Compu tatio n of n et income on business in United States . Insurance companies other than life or mu- tual . Tax imposed . Ante, p . 797. Domestic companies . Foreign companies . Meaning of terms. "Gross income ." "Net income ." "Investment in- Come . ,, Sources of. "Underwriting in- come ." "Premiums earned .' SEVENTIETH CONGRESS . SEss . I. CH. 852 .' 1928 . but if the net income is more than $25,000 the tax imposed by section 201 shall not exceed the tax which would be payable if the $3,000 credit were allowed, plus the amount of the net income in excess of $25,000 . (b) Rental value of real estate .-No deduction shall be made under subsection (a) (6) and (7) of this section on account of any real estate owned and occupied in whole or in part by a life insurance company unless there is included in the return of gross income the rental value of the space so occupied . Such rental value shall be not less than a sum which in addition to any rents received from othe r ten ants shall pro vide a net inc ome ( after ded uctin g tax es, depreciation, and all other expenses) at the rate of 4 per centum per annum of the book value at the end of the taxable year of the real estate so own ed or occupi ed .
V (c) Foreign life insurance companies.-In the case of a foreign life insurance company the amount of its net income for any taxable year from sources within the United States shall be the same propor- tion of its net income for the taxable year from sources within and -without the United States, which the reserve funds required by law and held by it at the end of the taxable year upon business transacted within the United States is of the reserve funds held by it at the end of the taxable year upon all business transacted . SEC . 204. INSURANCE COMPANIES OTHER THAN LIFE OR MUT UAL . (a) Imposition of tax .-In lieu of the tax imposed by section 13 of this title, there shall be levied, collected, and paid for each taxable year upon the net income of every insurance company (other than a life or mutual insurance company) a tax as follows : (1) In the case of such a domestic insurance company, 12 per centum of its net income ; (2) In the case of such a foreign insurance company, 12 per centum of its net income from sources within the United States . (b) Definition of income, etc.-In the case of an insurance com- pany subject to the tax imposed by this section- (1) Guess INCOME .-" Gross income " means the sum of (A) the combined gross amount earned during the taxable year, from investment income and from underwriting income as provided in this subsection, computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Convention of Insurance Commis- sioners, and (B) gain during the taxable year from the sale or o ther dispo sitio n of prop erty ; (2) NET INCOME. -" Net income" means the gross income as defin ed in paragr aph (1 ) of t his su bsectio n less the d educti ons allowed by subsection (c) of this section. (3) INVESTMENT INCOME ." Investment income " means the gross amount of income earned during the taxable year from intere st, di vidend s, and rents , comp uted as follo ws : To all interest, dividends and rents received during the taxabl e year , add intere st, di vidend s and r ents d ue and accru ed at the end of the taxable year, and deduct all interest, dividends and rents due and accrued at the end of the preceding taxable year ; (4) U NDERW RITING INCO ME . -- " Unde rwriting income" mea ns the premiums earned on insurance contracts during the taxable year le ss los ses in curred and e xpense s incur red ; (5) PREMIUMS EARNED .-" Premiums earned on insurance con- tracts during the taxable year" means an amount computed as fol lo ws
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