PUBLIC LAW 98-369—JULY 18, 1984 which are similar to the types of insurance contracts issued by a mutual life insurance company. Notwithstanding the first sentence of this subsection, if the aggregate fair market value of the invested assets and tangible property which are separately accounted for by the domestic life insurance company in the branch account exceeds the aggregate adjusted basis of such assets for purposes of determining gain, the domestic life insurance company shall be deemed to have sold all such assets on the first day of the taxable year for which the election under this subsection applies and the net gain shall be recognized to the domestic life insurance company on the deemed sale, but not in excess of the proportion of such net gain which equals the proportion which the aggregate fair market value of such assets which are transferred pursuant to this subsection is of the aggregate fair market value of all such assets. "SEC. 815. DISTRIBUTIONS TO SHAREHOLDERS FROM PRE.1984 POLICYHOLDERS SURPLUS ACCOUNT.
"(a) GENERAL RULE.—In the case of a stock life insurance company which has an existing policyholders surplus account, the tax imposed by section 801 for any taxable year shall be the amount which would be imposed by such section for such year on the sum of— "(1) life insurance company taxable income for such year (but not less than zero), plus "(2) the amount of direct and indirect distributions during such year to shareholders from such account. "(b) ORDERING RULE.—For purposes of this section, any distribution to shareholders shall be treated as made— "(1) first out of the shareholders surplus account, to the extent thereof, "(2) then out of the policyholders surplus account, to the extent thereof, and "(3) finally, out of other accounts. "(c) SHAREHOLDERS SURPLUS ACCOUNT.—
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"(1) IN GENERAL.—Each stock life insurance company which has an existing policyholders surplus account shall continue its shareholders surplus account for purposes of this part. "(2) ADDITIONS TO ACCOUNT.—The amount added to the shareholders surplus account for any taxable year beginning after December 31, 1983, shall be the excess of— "(A) the sum of— "(i) the life insurance company's taxable income (but not below zero), "(ii) the special deductions provided by section 806, and "(iii) the deductions for dividends received provided by sections 243, 244, and 245 (as modified by section 805(a)(4)) and the amount of interest excluded from gross income under section 103, over "(B) the taxes imposed for the taxable year by section 801 (determined without regard to this section). "(3) SUBTRACTIONS FROM ACCOUNT.—There shall be subtracted from the shareholders surplus account for any taxable year the amount which is treated under this section as distributed out of such account. "(d) POLICYHOLDERS SURPLUS ACCOUNT.—
98 STAT. 747
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26 USC 815.
Ante, p. 720.
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Ante, p. 724.
Ante, p. 722. Ante, p. 720.
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