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domestic yield each year. Section 842(c)(4) provides that each
calculation for any taxable year "shall be based on such
representative data with respect to domestic insurance companies
for the second preceding taxable year as the Secretary considers
appropriate."
C. Worldwide Election
Section 842(b)(4) permits a foreign insurance company to
elect to use its own worldwide current investment yield
(worldwide yield) rather than the domestic yield.8 A company's
worldwide yield is obtained by dividing the net investment income
8Sec. 842(b)(4) provides in pertinent part:
(4) Election to use worldwide yield.--
(A) In general.--If the foreign company makes
an election under this paragraph, such company's
worldwide current investment yield shall be taken
into account in lieu of the domestic investment
yield for purposes of paragraph (1)(B).
(B) Worldwide current investment yield.--For
purposes of subparagraph (A), the term "worldwide
current investment yield" means the percentage
obtained by dividing--
(i) the net investment income of the
company from all sources, by
(ii) the mean of all assets of the
company (whether or not held in the United
States).
(C) Election.--An election under this
paragraph shall apply to the taxable year for
which made and all subsequent taxable years unless
revoked with the consent of the Secretary.
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