§594 — Alternative tax for mutual savings banks conducting life insurance business
Statute Text — 26 U.S.C. §594
In the case of a mutual savings bank not having capital stock represented by shares, authorized under State law to engage in the business of issuing life insurance contracts, and which conducts a life insurance business in a separate department the accounts of which are maintained separately from the other accounts of the mutual savings bank, there shall be imposed in lieu of the tax imposed by section 11, a tax consisting of the sum of the partial taxes determined under paragraphs (1) and (2):
A partial tax computed on the taxable income determined without regard to any items of gross income or deductions properly allocable to the business of the life insurance department, at the rates and in the manner as if this section had not been enacted; and
a partial tax computed on the income of the life insurance department determined without regard to any items of gross income or deductions not properly allocable to such department, at the rates and in the manner provided in subchapter L (sec. 801 and following) with respect to life insurance companies.
Subsection (a) shall apply only if the life insurance department would, if it were treated as a separate corporation, qualify as a life insurance company under section 816.
Treasury Regulations
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Treas. Reg. §1.594-1Mutual savings banks conducting life insurance business
(a) Scope of application. Section 594 applies to the case of a mutual savings bank not having capital stock represented by shares which conducts a life insurance business, if:
(1) The conduct of the life insurance business is authorized under State law,
(2) The life insurance business is carried on in a separate department of the bank,
(3) The books of account of the life insurance business are maintained separately from other departments of the bank, and
(4) The life insurance department of the bank would, if it were treated as a separate corporation, qualify as a life insurance company under section 801.
(b) Computation of tax. In the case of a mutual savings bank conducting a life insurance business to which section 594 is applicable, the tax upon such bank consists of the sum of the following:
(1) A partial tax computed under section 11 upon the taxable income of the bank determined without regard to any items of income or deduction properly allocable to the life insurance department, and
(2) A partial tax computed on the income (or, in the case of taxable years beginning before January 1, 1955, the taxable income (as defined in section 803)) of the life insurance department determined without regard to any items of income or deduction not properly allocable to such department, at the rates and in the manner provided in subchapter L (section 801 and following), chapter 1 of the Code, with respect to life insurance companies.
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Treas. Reg. §1.594-1(a)Scope of application.
Scope of application. Section 594 applies to the case of a mutual savings bank not having capital stock represented by shares which conducts a life insurance business, if:
(1) The conduct of the life insurance business is authorized under State law,
(2) The life insurance business is carried on in a separate department of the bank,
(3) The books of account of the life insurance business are maintained separately from other departments of the bank, and
(4) The life insurance department of the bank would, if it were treated as a separate corporation, qualify as a life insurance company under section 801.
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Treas. Reg. §1.594-1(b)Computation of tax.
Computation of tax. In the case of a mutual savings bank conducting a life insurance business to which section 594 is applicable, the tax upon such bank consists of the sum of the following:
(1) A partial tax computed under section 11 upon the taxable income of the bank determined without regard to any items of income or deduction properly allocable to the life insurance department, and
(2) A partial tax computed on the income (or, in the case of taxable years beginning before January 1, 1955, the taxable income (as defined in section 803)) of the life insurance department determined without regard to any items of income or deduction not properly allocable to such department, at the rates and in the manner provided in subchapter L (section 801 and following), chapter 1 of the Code, with respect to life insurance companies.
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