CH. 1—NORMAL TAXES AND SURTAXES (1)
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NORMAL TAX.—
(A) TAXABLE YEARS BEGINNING BEFORE APRIL i, 1955.—In the case of taxable years beginning before April 1, 1955, a normal tax of 30 percent of the mutual insurance company taxable income, or 60 percent of the amount by which such taxable income exceeds $50,000, whichever is the lesser; (B) TAXABLE YEARS BEGINNING AFTER MARCH 31, 1955.—In the case of a taxable year beginning after March 31, 1955, a normal tax of 25 percent of the mutual insurance company taxable income, or 50 percent of the amount by which such taxable income exceeds $50,000, whichever is the lesser; plus (2) SURTAX.—A surtax of 22 percent of the mutual insurance company taxable income (computed as provided in subsection (a) (1)) in excess of $25,000, or 33 percent of the amount by which such taxable income exceeds $50,000, whichever is the lesser. (c) GROSS AMOUNT R E C E IV E D, OVER $75,000 BUT L E S S T H A N $125,000.—If the gross amount received during the taxable year from interest, dividends, rents, and premiums (including deposits and assessments) is over $75,000 but less than $125,000, the tax imposed by subsection (a) or subsection (b), whichever applies, shall be reduced to an amount which bears the same proportion to the amount of the tax determined under such subsection as the excess over $75,000 of such gross amount received bears to $50,000. (d) N o UNITED STATES INSURANCE BUSINESS.—Foreign mutual insurance companies (other than a life or marine insurance company or a fire insurance company subject to the tax imposed by section 831) not carrying on an insurance business within the United States shall not be subject to this part but shall be taxable as other foreign corporations. • • • • (e) ALTERNATIVE T A X ON CAPITAL G A I N S. —
For alternative tax in case of capital gains, see section 1201(a). SEC. 822. DETERMINATION OF MUTUAL INSURANCE COMPANY TAXABLE INCOME. (a) DEFINITION.—For purposes of section 821, the term "mutual insurance company taxable income" means the gross investment income minus the deductions provided in subsection (c). (b) GROSS INVESTMENT INCOME.—For purposes of subsection (a), the term "gross investment income" means the gross amount oi income during the taxable year from interest, dividends, rents, and gains from sales or exchanges of capital assets to the extent provided in subchapter P (sec. 1201 and following, relating to capital gains and losses). (c) DEDUCTIONS.—In computing mutual insurance company taxable income, the following deductions shall be allowed: (1) T A X - F R E E INTEREST.—The amount of interest which under section 103 is excluded for the taxable year from gross income. (2) INVESTMENT EXPENSES.—Investment expenses paid or accrued during the taxable year. If any general expenses are in part assigned to or included in the investment expenses, the total deduction under this paragraph shall not exceed one-fourth of 1 percent of the mean of the book value of the invested assets held at the beginning and end of the taxable year plus one-fourth of the § 822(c)(2)
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