Except as otherwise provided in this section, any mutual insurance company which is an interinsurer or reciprocal underwriter (hereinafter in this section referred to as a “reciprocal”) subject to the taxes imposed by section
831(a) may, under regulations prescribed by the Secretary, elect to be subject to the limitation provided in subsection (b). Such election shall be effective for the taxable year for which made and for all succeeding taxable years, and shall not be revoked except with the consent of the Secretary.
The deduction for amounts paid or incurred in the taxable year to the attorney-in-fact by a reciprocal making the election provided in subsection (a) shall be limited to, but in no case increased by, the deductions of the attorney-in-fact allocable, in accordance with regulations prescribed by the Secretary, to the income received by the attorney-in-fact from the reciprocal.
An election may not be made by a reciprocal under subsection (a) unless the attorney-in-fact of such reciprocal—
(2)consents in such manner as the Secretary shall prescribe by regulations to make available such information as may be required during the period in which the election provided in subsection (a) is in effect, under regulations prescribed by the Secretary;
(3)reports the income received from the reciprocal and the deductions allocable thereto under the same method of accounting under which the reciprocal reports deductions for amounts paid to the attorney-in-fact; and
(4)files its return on the calendar year basis.
Any reciprocal electing to be subject to the limitation provided in subsection (b) shall be credited with so much of the tax paid by the attorney-in-fact as is attributable, under regulations prescribed by the Secretary, to the income received by the attorney-in-fact from the reciprocal in such taxable year.
(e) Benefits of graduated rates denied
Any increase in the taxable income of a reciprocal attributable to the limits provided in subsection (b) shall be taxed at the highest rate of tax specified in section
(f) Adjustment for refund
If for any taxable year an attorney-in-fact is allowed a credit or refund for taxes paid with respect to which credit or refund to the reciprocal resulted under subsection (d), the taxes of such reciprocal for such taxable year shall be properly adjusted under regulations prescribed by the Secretary.
(g) Taxes of attorney-in-fact unaffected
Nothing in this section shall increase or decrease the taxes imposed by this chapter on the income of the attorney-in-fact.
Subsec. (f). Pub. L. 100–647, § 1010(f)(3), substituted “subsection (d)” for “subsection (e)”.
1986—Pub. L. 99–514, § 1024(a)(3), renumbered section
826 of this title as this section.
Subsec. (d). Pub. L. 99–514, § 1024(c)(9)(A), redesignatedsubsec. (e) as (d) and struck out former subsec. (d), special rule, which read as follows: “In applying section
824(d)(1)(D), any amount which was added to the protection against loss account by reason of an election under this section shall be treated as having been added by reason of section
Subsec. (e). Pub. L. 99–514, § 1024(c)(9), redesignatedsubsec. (f) as (e), substituted “Benefits of graduated rates” for “Surtax exemption” in heading, and amended text generally. Prior to amendment, text read as follows: “Any increase in taxable income of a reciprocal attributable to the limitation provided in subsection (b) shall be taxed without regard to the surtax exemption provided in section
821(a)(2).” Former subsec. (e) redesignated (d).
Subsecs. (f) to (h). Pub. L. 99–514, § 1024(c)(9)(A), redesignatedsubsecs. (f) to (h) as (e) to (g), respectively.
1978—Subsec. (c)(1). Pub. L. 95–600substituted “the tax imposed by section
11” for “the taxes imposed by section
11(b) and (c)”.
1976—Subsecs. (a), (b), (c)(2), (e), (g). Pub. L. 94–455struck out “or his delegate” after “Secretary”.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647effective, 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) ofPub. L. 100–647, set out as a note under section
1 of this title.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514applicable to taxable years beginning after Dec. 31, 1986, see section 1024(e) ofPub. L. 99–514, set out as a note under section
831 of this title.
Effective Date of 1978 Amendment
Amendment by Pub. L. 95–600applicable to taxable years beginning after Dec. 31, 1978, see section 301(c) ofPub. L. 95–600, set out as a note under section
11 of this title.
Section applicable with respect to taxable years beginning after Dec. 31, 1962, see section 8(h) ofPub. L. 87–834, set out as an Effective Date of 1962 Amendment note under section
501 of this title.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.
Description of Change
Statutes at Large
LII has no control over and does not endorse any external Internet site that contains links to or references LII.