Howard V. More - Page 13




                                               - 13 -                                                  
            “Income from investments made in the ordinary course of a trade                            
            or business of furnishing insurance or annuity contracts or                                
            reinsuring risks underwritten by insurance companies” found in                             
            subdivision (ii)(C) of section 1.469-2T(c)(3), Temporary Income                            
            Tax Regs., 53 Fed. Reg. 5686, 5713 (Feb. 25, 1988), (subdivision                           
            (ii)(C)).                                                                                  
                  Respondent contends that petitioner’s gain was not derived                           
            in the ordinary course of a trade or business within the meaning                           
            of subdivision (ii)(C).  On brief, petitioner does not address                             
            the application of this regulation.                                                        
                  In light of the restrictive nature of subdivision (ii)(C),                           
            we read it narrowly.  We look closely at the language contained                            
            in the regulation and interpret it according to its ordinary and                           
            plain meaning.  See FDIC v. Meyer, 510 U.S. 471, 476 (1994);                               
            Borregard v. National Transp. Safety Bd., 46 F.3d 944, 945-946                             
            (9th Cir. 1995); ICI Pension Fund v. Commissioner, 112 T.C. 83,                            
            87 (1999).                                                                                 
                  Subdivision (ii)(C) provides that income from investments                            
            made in the ordinary course of a trade or business of reinsuring                           
            risks underwritten by insurance companies constitutes “gross                               


                  5(...continued)                                                                      
                  patron; and                                                                          
                        (G) Other income identified by the Commissioner as                             
                  income derived by the taxpayer in the ordinary course                                
                  of a trade or business.                                                              





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