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“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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