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PUBLIC LAW 429-MAR. 13, 1966
[70 S T A T.
"(1) TAX-FREE INTEREST.—The amount of interest received or accrued during the taxable year which under section 103 is exckided from gross income. "(2)
INVESTMENT EXPENSES.—
" (A) Investment expenses paid or accrued during the taxable year. " (B) If any general expenses are in part assigned to or included in the investment expenses, the total deduction under this paragraph shall not exceed— "(i) 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 "(ii) one-fourth of the amount by which the net investment income (computed without any deduction for investment expenses allowed by this paragraph, or for tax-free interest allowed by paragraph (1)) exceeds 3 % percent of the book value of the mean of the invested assets held at the beginning and end of the taxable year. " (3) REAL ESTATE EXPENSES.—Taxes (as provided in section
68A sut. 47.
164) ^ and other expenses, paid or accrued during the taxable year exclusively on or with respect to the real estate owned by the company. No deduction shall be allowed under this paragraph for any amount paid out for new buildings, or for permanent improvements or betterments made to increase the value of any property. "(4) DEPRECIATION.—The depreciation deduction allowed by 26 uic Ve^yi* section 167. 68A suit. 207. " (5) DEPLETION.—The deduction allowed by section 611 ^* ^^^* (relating to depletion). "(6) TRADE OR BUSINESS DEDUCTIONS.—The deductions allowed by this subtitle (without regard to this part) which are attributable to any trade or business (other than an insurance business) carried on by the life insurance company, or by a partnership of which the life insurance company is a partner; except that for purposes of this paragraph— " (A) There shall be excluded losses from— , " (i) sales or exchanges of capital assets, "(ii) sales or exchanges of property used in the trade |8A^|t?t'325. or business (as defined in section 1 2 3 1 (b)), and "(iii) the compulsory or involuntary conversion (as a result of destruction, in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property used in the trade or business (as so defined). " (B) Any item, to the extent attributable to the carrying on of the insurance business, shall not be taken into account. " (C) The deduction for net operating losses provided in 68A Stat. 63. section 172, and the special deductions for corporations pro68A^itrtl'72. vided in part VIII of subchapter B, shall not be allowed, seq! "^^ ^'^^ *' " (d) RENTAL VALUE OF REAL ESTATE.—The deduction under subsection (c)(3) and (4) on account of any real estate OAvned and occupied in whole or in part by a life insurance company shall be limited to an amount which bears the same ratio to such deduction (computed without regard to this subsection) as the rental value of the space not so occupied bears to the rental value of the entire property. " (e) AMORTIZATION OF PREMIUM AND ACCRUAL OF DISCOUNT.—The
gross investment income, the deduction for wholly-exempt interest allowed by subsection (c)(1), and the deduction allowed by section
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