- 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 annualPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011