
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC831]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                    Subchapter L--Insurance Companies
 
                   PART II--OTHER INSURANCE COMPANIES
 
Sec. 831. Tax on insurance companies other than life insurance 
        companies
        

(a) General rule

    Taxes computed as provided in section 11 shall be imposed for each 
taxable year on the taxable income of every insurance company other than 
a life insurance company.

(b) Alternative tax for certain small companies

                           (1) In general

        In lieu of the tax otherwise applicable under subsection (a), 
    there is hereby imposed for each taxable year on the income of every 
    insurance company to which this subsection applies a tax computed by 
    multiplying the taxable investment income of such company for such 
    taxable year by the rates provided in section 11(b).

           (2) Companies to which this subsection applies

        (A) In general

            This subsection shall apply to every insurance company other 
        than life (including interinsurers and reciprocal underwriters) 
        if--
                (i) the net written premiums (or, if greater, direct 
            written premiums) for the taxable year exceed $350,000 but 
            do not exceed $1,200,000, and
                (ii) such company elects the application of this 
            subsection for such taxable year.

        The election under clause (ii) shall apply to the taxable year 
        for which made and for all subsequent taxable years for which 
        the requirements of clause (i) are met. Such an election, once 
        made, may be revoked only with the consent of the Secretary.

        (B) Controlled group rules

            (i) In general

                For purposes of subparagraph (A), in determining whether 
            any company is described in clause (i) of subparagraph (A), 
            such company shall be treated as receiving during the 
            taxable year amounts described in such clause (i) which are 
            received during such year by all other companies which are 
            members of the same controlled group as the insurance 
            company for which the determination is being made.
            (ii) Controlled group

                For purposes of clause (i), the term ``controlled 
            group'' means any controlled group of corporations (as 
            defined in section 1563(a)); except that--
                    (I) ``more than 50 percent'' shall be substituted 
                for ``at least 80 percent'' each place it appears in 
                section 1563(a), and
                    (II) subsections (a)(4) and (b)(2)(D) of section 
                1563 shall not apply.

            (3) Limitation on use of net operating losses

        For purposes of this part, except as provided in section 844, a 
    net operating loss (as defined in section 172) shall not be 
    carried--
            (A) to or from any taxable year for which the insurance 
        company is not subject to the tax imposed by subsection (a), or
            (B) to any taxable year if, between the taxable year from 
        which such loss is being carried and such taxable year, there is 
        an intervening taxable year for which the insurance company was 
        not subject to the tax imposed by subsection (a).

(c) Cross references

            (1) For alternative tax in case of capital gains, see 
        section 1201(a).
            (2) For taxation of foreign corporations carrying on an 
        insurance business within the United States, see section 842.
            (3) For exemption from tax for certain insurance companies 
        other than life, see section 501(c)(15).

(Aug. 16, 1954, ch. 736, 68A Stat. 264; Pub. L. 87-834, Sec. 8(e)(1), 
(f), (g)(4)(B), Oct. 16, 1962, 76 Stat. 997-999; Pub. L. 89-809, title 
I, Sec. 104(i)(6), Nov. 13, 1966, 80 Stat. 1562; Pub. L. 94-455, title 
XIX, Secs. 1901(a)(107), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1782, 
1834; Pub. L. 99-514, title X, Sec. 1024(a)(4), Oct. 22, 1986, 100 Stat. 
2405; Pub. L. 100-647, title I, Sec. 1010(f)(1), (9), Nov. 10, 1988, 102 
Stat. 3454, 3455.)


                               Amendments

    1988--Subsec. (b)(2)(A). Pub. L. 100-647, Sec. 1010(f)(1), inserted 
at end ``The election under clause (ii) shall apply to the taxable year 
for which made and for all subsequent taxable years for which the 
requirements of clause (i) are met. Such an election, once made, may be 
revoked only with the consent of the Secretary.''
    Subsec. (b)(3). Pub. L. 100-647, Sec. 1010(f)(9), added par. (3).
    1986--Pub. L. 99-514 amended section generally, substituting 
provisions imposing taxes on insurance companies other than life 
insurance companies, with an alternative tax on certain small companies, 
for provisions imposing taxes on insurance companies (other than life or 
mutual), mutual marine insurance companies, and certain mutual fire or 
flood insurance companies, with an election for multiple line companies 
to be taxed on total income.
    1976--Subsec. (a). Pub. L. 94-455, Sec. 1901(a)(107), substituted 
``on the taxable income'' for ``or the taxable income''.
    Subsec. (b). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ``or 
his delegate'' after ``Secretary'' wherever appearing.
    1966--Subsec. (b). Pub. L. 89-809, Sec. 104(i)(6)(A), redesignated 
subsec. (c) as (b). Former subsec. (b), which excepted foreign insurance 
companies other than life or mutual insurance companies, foreign mutual 
marine insurance companies, and foreign mutual fire insurance companies 
not carrying on an insurance business within the United States and 
provided that they would be taxable as other foreign corporations, was 
struck out.
    Subsecs. (c), (d). Pub. L. 89-809, Sec. 104(i)(6)(B), redesignated 
subsec. (d) as (c) and added item (2). Former subsec. (c) redesignated 
(b).
    1962--Pub. L. 87-834, Sec. 8(g)(4)(B), substituted ``and certain 
mutual fire or flood insurance companies'' for ``and mutual fire 
insurance companies issuing perpetual policies'' in section catchline.
    Subsec. (a). Pub. L. 87-834, Sec. 8(e)(1), included flood insurance 
companies, and substituted provisions authorizing imposition of the tax 
on those companies whose principal business is the issuance of policies 
for which the premium deposits are the same, regardless of the length of 
the term for which the policies are written, if the unabsorbed portion 
of such premium deposits not required for losses, expenses, or 
establishment of reserves is returned or credited to the policyholder on 
cancellation or expiration of the policy for provisions which authorized 
imposition of tax on those companies which issued policies for which the 
sole premium charged is a single deposit which (except for such 
deduction of underwriting costs as may be provided) is refundable on 
cancellation or expiration of the policy.
    Subsecs. (c), (d). Pub. L. 87-834, Sec. 8(f), added subsec. (c) and 
redesignated former subsec. (c) as (d).


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1986 Amendment

    Section 1024(e) of Pub. L. 99-514 provided that: ``The amendments 
made by this section [amending this section and sections 501, 832, 834, 
835, 841, 842, 844, 891, 1201, 1504, and 1563 of this title, 
redesignating former sections 822 and 826 of this title as sections 834 
and 835 of this title, respectively, and repealing sections 821, 823, 
824, and 825 of this title] (and the provisions of subsection (d) [set 
out below]) shall apply to taxable years beginning after December 31, 
1986.''


                    Effective Date of 1976 Amendment

    Amendment by section 1901(a)(107) of Pub. L. 94-455 effective for 
taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. 
L. 94-455, set out as a note under section 2 of this title.


                    Effective Date of 1966 Amendment

    Amendment by Pub. L. 89-809 applicable with respect to taxable years 
beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89-809, set 
out as a note under section 11 of this title.


                    Effective Date of 1962 Amendment

    Amendment by Pub. L. 87-834 applicable with respect to taxable years 
beginning after Dec. 31, 1962, see section 8(h) of Pub. L. 87-834, set 
out as a note under section 501 of this title.


                  Transitional Rules for 1984 Amendment

    Section 1024(d) of Pub. L. 99-514, as amended by Pub. L. 100-647, 
title I, Sec. 1010(f)(8), Nov. 10, 1988, 102 Stat. 3454, provided that:
    ``(1) Treatment of amounts in protection against loss account.--In 
the case of any insurance company which had a protection against loss 
account for its last taxable year beginning before January 1, 1987, 
there shall be included in the gross income of such company for any 
taxable year beginning after December 31, 1986, the amount which would 
have been included in gross income for such taxable year under section 
824 of the Internal Revenue Code of 1954 [now 1986] (as in effect on the 
day before the date of the enactment of this Act [Oct. 22, 1986]). For 
purposes of the preceding sentence, no addition to such account shall be 
made for any taxable year beginning after December 31, 1986. In the case 
of a company taxable under section 831(b) of the Internal Revenue Code 
of 1986 (as amended by subsection (a)), any amount included in gross 
income under this paragraph shall be treated as gross investment income.
    ``(2) Transitional rule for unused loss carryover under section 
825.--Any unused loss carryover under section 825 of the Internal 
Revenue Code of 1954 (as in effect on the day before the date of the 
enactment of this Act [Oct. 22, 1986]) which--
        ``(A) is from a taxable year beginning before January 1, 1987, 
    and
        ``(B) could have been carried under such section to a taxable 
    year beginning after December 31, 1986, but for the repeal made by 
    subsection (a)(1) [repealing sections 821 and 823 to 825 of this 
    title],
shall be included in the net operating loss deduction under section 
832(c)(10) of such Code without regard to the limitations of section 
844(b) of such Code.''

                  Section Referred to in Other Sections

    This section is referred to in sections 56, 501, 816, 832, 834, 835, 
841, 847, 891, 904, 1201 of this title; title 15 section 6712.
