- 43 - 13(...continued) shall be computed on the basis of a ratio the numerator of which is the excess of the assets over the total insurance liabilities, and the denominator of which is the total insurance liabilities. Sec. 805(a) of the 1954 Internal Revenue Code, as amended, defined policy and other contract liability requirements as the sum of: (1) the adjusted life insurance reserves, multiplied by the adjusted reserves rate, (2) the mean of the pension plan reserves at the beginning and end of the taxable year, multiplied by the current earnings rate, and (3) the interest paid. Sec. 805(b)(2) of the 1954 Internal Revenue Code, as amended, defined the current earnings rate as: * * * the amount determined by dividing-- (A) the taxpayer's investment yield for such taxable year, by (B) the mean of the taxpayer's assets at the beginning and end of the taxable year. Sec. 805(b)(4) defined assets for purposes of the above sec. 805(b)(2) as follows "all assets of the company (including nonadmitted assets), other than real and personal property (excluding money) used by it in carrying on an insurance trade or business." Sec. 809(a)(2) of the 1954 Internal Revenue Code, as amended, defined "required interest" for purposes of subsection 819 as: the sum of the products obtained by multiplying-- (A) each rate of interest required, or assumed by the taxpayer, in calculating the reserves described in section 810(c) by (continued...)Page: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Next
Last modified: May 25, 2011