- 2 -
MEMORANDUM OPINION
SWIFT, Judge: For 1991 and 1992, respondent determined
deficiencies in petitioner's Federal income taxes of $369,255 and
$242,132, respectively.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
After settlement of some issues, the issue for decision is
whether petitioner (Best Life), in computing under section 816(a)
the qualifying fraction for life insurance company tax treatment,
should treat accrued unpaid losses on cancelable accident and
health (CA&H) insurance policies as part of its total reserves.
Background
This case was submitted fully stipulated under Rule 122, and
the facts are not in dispute.
During the years in issue, Best Life operated as an
insurance company with its principal place of business located in
Irvine, California. Best Life insured the following types of
insurance risks: Individual ordinary life, cancelable group-term
life, and CA&H.
Insurance companies are required by insurance regulators to
maintain certain reserves to assure payment of future claims.
All 50 States have adopted model regulations and utilize annual
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011