264
INTERNAL REVENUE CODE OF 1954
of the management shall not be included in return premiums but shall be treated as dividends to policyholders under paragraph (2). (2) DIVIDENDS TO POLICYHOLDERS.—The term "dividends to policyholders" means dividends and similar distributions paid or declared to policyholders. For purposes of the preceding sentence, the term "paid or declared" shall be construed according to the method regularly employed in keeping the books of the insurance company. PART III—OTHER INSURANCE COMPANIES Sec. 831. Tax on insurance companies (other than life or mutual), mutual marine insurance companies, and mutual fire insurance companies issuing perpetual policies. Sec. 832. Insurance company taxable income. SEC. 831. TAX ON INSURANCE COMPANIES (OTHER THAN LIFE OR MUTUAL), MUTUAL MARINE INSURANCE COMPANIES, AND MUTUAL FIRE INSURANCE COMPANIES ISSUING PERPETUAL POLICIES. (a) IMPOSITION OF TAX.—Taxes computed as provided in section
11 shall be imposed for each taxable year on the taxable income of every insurance company (other than a life or mutual insurance company), every mutual marine insurance company, and every mutual fire insurance company exclusively issuing either perpetual policies or policies for which the sole premium charged is a single deposit which (except for such deduction of underwriting costs as may be provided) is refundable on cancellation or expiration of the policy. (b) N o UNITED STATES INSURANCE BUSINESS.—Foreign insurance
companies (other than a life or mutual insurance company), foreign mutual marine insurance companies, and foreign mutual fire insurance companies described in subsection (a), «iot carrying on an insurance business within the United States, shall not be subject to this part but shall be taxable as other foreign corporations. (c) ALTERNATIVE T A X ON CAPITAL G A I N S. — For alternative tax in case of capital gains, see section 1201(a). SEC. 832. INSURANCE COMPANY TAXABLE INCOME. (a) DEFINITION OF TAXABLE INCOIVIE.—In the case of an insurance
company subject to the tax imposed by section 831, the term "taxable income" means the gross income as defined in subsection (b)(1) less the deductions allowed by subsection (c). (b) DEFINITIONS.—In the case of an insurance company subject to the tax imposed by section 831— (1) GROSS INCOME.—The term "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, compjiited on the basis of the underwriting and investment exhibit of the annual statement approved by the National Convention of Insurance Commissioners, (B) gain during the taxable year from the sale or other disposition of property, and (C) all other items constituting gross income under subchapter B, except that, in the case of a mutual fire insurance company §823(1)
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