§810 — Repealed. Pub. L. 115–97, title I, § 13511(b)(1), Dec. 22, 2017, 131 Stat. 2142]
17 citing cases
Statute Text — 26 U.S.C. §810
[§ 810. Repealed. Pub. L. 115–97, title I, § 13511(b)(1), Dec. 22, 2017, 131 Stat. 2142] Section, added Pub. L. 98–369, div. A, title II, § 211(a), July 18, 1984, 98 Stat. 738; amended Pub. L. 111–92, § 13(c), Nov. 6, 2009, 123 Stat. 2994; Pub. L. 113–295, div. A, title II, § 221(a)(41)(J), Dec. 19, 2014, 128 Stat. 4044, related to operations loss deduction. A prior section 810, added Pub. L. 86–69, § 2(a), June 25, 1959, 73 Stat. 125; amended Pub. L. 91–172, title I, § 121(b)(5)(B), title IX, § 907(a)(2), Dec. 30, 1969, 83 Stat. 541, 715, related to rules for certain reserves, prior to the general revision of this part by Pub. L. 98–369, § 211(a). Statutory Notes and Related Subsidiaries Effective Date of RepealRepeal applicable to losses arising in taxable years beginning after Dec. 31, 2017, see section 13511(c) of Pub. L. 115–97, set out as an Effective Date of 2017 Amendment note under section 381 of this title.
Treasury Regulations
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Treas. Reg. §1.810-2Rules for certain reserves
(a) Adjustment for decrease or increase in certain reserve items—(1) Adjustment for decrease. Section 810(a) provides that if the sum of the items described in section 810(c) and paragraph (b) of this section at the beginning of the taxable year exceeds the sum of such items at the end of the taxable year (reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1)), the amount of such excess shall be taken into account as a net decrease referred to in section 809(c)(2) and paragraph (a)(2) of § 1.809-4 in determining gain or loss from operations.
(2) Adjustment for increase. Section 810(b) provides that if the sum of the items described in section 810(c) and paragraph (b) of this section at the end of the taxable year (reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1)) exceeds the sum of such items at the beginning of the taxable year, the amount of such excess shall be taken into account as a net increase referred to in section 809(d)(2) and paragraph (a)(2) of § 1.809-5 in determining gain or loss from operations.
(b) Items taken into account. The items described in section 810(c) and referred to in section 810 (a) and (b) and paragraph (a) of this section are:
(1) The life insurance reserves (as defined in section 801(b) and § 1.801-4);
(2) The unearned premiums and unpaid losses included in total reserves under section 801(c)(2) and § 1.801-5;
(3) The amounts (discounted at the rates of interest assumed by the company) necessary to satisfy the obligations under insurance or annuity contracts (including contracts supplementary thereto), but only if such obligations do not involve (at the time with respect to which the computation is made under this subparagraph) life, health, or accident contingencies;
(4) Dividend accumulations, and other amounts, held at interest in connection with insurance or annuity contracts (including contracts supplementary thereto); and
(5) Premiums received in advance, and liabilities for premium deposit funds.
(6) Special contingency reserves under contracts of group term life insurance or group health and accident insurance which are established and maintained for the provision of insurance on retired lives, for premium stabilization, or for a combination thereof.
For purposes of this paragraph, the same item shall be counted only once and deficiency reserves (as defined in section 801(b)(4) and paragraph (e)(4) of § 1.801-4) shall not be taken into account.
(c) Special rules. For purposes of section 810 (a) and (b) and paragraph (a) of this section, in determining whether there is a net increase or decrease in the sum of the items described in section 810(c) and paragraph (b) of this section for the taxable year, the following rules shall apply:
(1) Computation of net increase or decrease in reserves. The sum of the items described in section 810(c) and paragraph (b) of this section at the beginning of the taxable year shall be the aggregate of the sums of each of such items at the beginning of the taxable year. The sum of the items described in section 810(c) and paragraph (b) of this section at the end of the taxable year shall be the aggregate of the sums of each of such items at the end of the taxable year. However, in order to determine whether there is a net increase or decrease in such items for the taxable year, the aggregate of the sums of the items at the end of the taxable year must first be reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1).
(2) Effect of change in basis in computing reserves. Any increase or decrease in the sum of the items described in section 810(c) and paragraph (b) of this section for the taxable year which is attributable to a change in the basis used in computing such items during the taxable year shall not be taken into account under section 810 (a) or (b) and paragraph (a) of this section but shall be taken into account in the manner prescribed in section 810(d) and paragraph (a) of § 1.810-3.
(3) Effect of section 818(c) election. If a company which computes its life insurance reserves on a preliminary term basis elects to revalue such reserves on a net level premium basis under section 818(c), the sum of such reserves at the beginning and end of all taxable years (including the first taxable year) for which the election applies shall be the sum of such reserves computed on such net level premium basis.
(4) Cross references. For taxable years beginning before January 1, 1970, see section 810(e) (as in effect for such years) for special rules for determining the net increase or decrease in the sum of the items described in section 810(c) and paragraph (b) of this section in the case of certain voluntary employees' beneficiary associations. For similar special rules in the case of life insurance companies issuing variable annuity contracts, see section 801(g)(4) and the regulations thereunder.
(d) Illustration of principles. The provisions of section 810 (a) and (b) and this section may be illustrated by the following examples:
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Treas. Reg. §1.810-2(a)Adjustment for decrease or increase in certain reserve items—(1) Adjustment for decrease.
Adjustment for decrease or increase in certain reserve items—(1) Adjustment for decrease. Section 810(a) provides that if the sum of the items described in section 810(c) and paragraph (b) of this section at the beginning of the taxable year exceeds the sum of such items at the end of the taxable year (reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1)), the amount of such excess shall be taken into account as a net decrease referred to in section 809(c)(2) and paragraph (a)(2) of § 1.809-4 in determining gain or loss from operations.
(2) Adjustment for increase. Section 810(b) provides that if the sum of the items described in section 810(c) and paragraph (b) of this section at the end of the taxable year (reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1)) exceeds the sum of such items at the beginning of the taxable year, the amount of such excess shall be taken into account as a net increase referred to in section 809(d)(2) and paragraph (a)(2) of § 1.809-5 in determining gain or loss from operations.
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Treas. Reg. §1.810-2(b)Items taken into account.
Items taken into account. The items described in section 810(c) and referred to in section 810 (a) and (b) and paragraph (a) of this section are:
(1) The life insurance reserves (as defined in section 801(b) and § 1.801-4);
(2) The unearned premiums and unpaid losses included in total reserves under section 801(c)(2) and § 1.801-5;
(3) The amounts (discounted at the rates of interest assumed by the company) necessary to satisfy the obligations under insurance or annuity contracts (including contracts supplementary thereto), but only if such obligations do not involve (at the time with respect to which the computation is made under this subparagraph) life, health, or accident contingencies;
(4) Dividend accumulations, and other amounts, held at interest in connection with insurance or annuity contracts (including contracts supplementary thereto); and
(5) Premiums received in advance, and liabilities for premium deposit funds.
(6) Special contingency reserves under contracts of group term life insurance or group health and accident insurance which are established and maintained for the provision of insurance on retired lives, for premium stabilization, or for a combination thereof.
For purposes of this paragraph, the same item shall be counted only once and deficiency reserves (as defined in section 801(b)(4) and paragraph (e)(4) of § 1.801-4) shall not be taken into account.
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Treas. Reg. §1.810-2(c)Special rules.
Special rules. For purposes of section 810 (a) and (b) and paragraph (a) of this section, in determining whether there is a net increase or decrease in the sum of the items described in section 810(c) and paragraph (b) of this section for the taxable year, the following rules shall apply:
(1) Computation of net increase or decrease in reserves. The sum of the items described in section 810(c) and paragraph (b) of this section at the beginning of the taxable year shall be the aggregate of the sums of each of such items at the beginning of the taxable year. The sum of the items described in section 810(c) and paragraph (b) of this section at the end of the taxable year shall be the aggregate of the sums of each of such items at the end of the taxable year. However, in order to determine whether there is a net increase or decrease in such items for the taxable year, the aggregate of the sums of the items at the end of the taxable year must first be reduced by the amount of investment yield not included in gain or loss from operations for the taxable year by reason of section 809(a)(1).
(2) Effect of change in basis in computing reserves. Any increase or decrease in the sum of the items described in section 810(c) and paragraph (b) of this section for the taxable year which is attributable to a change in the basis used in computing such items during the taxable year shall not be taken into account under section 810 (a) or (b) and paragraph (a) of this section but shall be taken into account in the manner prescribed in section 810(d) and paragraph (a) of § 1.810-3.
(3) Effect of section 818(c) election. If a company which computes its life insurance reserves on a preliminary term basis elects to revalue such reserves on a net level premium basis under section 818(c), the sum of such reserves at the beginning and end of all taxable years (including the first taxable year) for which the election applies shall be the sum of such reserves computed on such net level premium basis.
(4) Cross references. For taxable years beginning before January 1, 1970, see section 810(e) (as in effect for such years) for special rules for determining the net increase or decrease in the sum of the items described in section 810(c) and paragraph (b) of this section in the case of certain voluntary employees' beneficiary associations. For similar special rules in the case of life insurance companies issuing variable annuity contracts, see section 801(g)(4) and the regulations thereunder.
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Treas. Reg. §1.810-2(d)Illustration of principles.
Illustration of principles. The provisions of section 810 (a) and (b) and this section may be illustrated by the following examples:
17 Citing Cases
810(a) (West Supp. 2002); Holman v. Stockton Savs. & Loan Bank, 122 P.2d 120 (Cal. Ct. App. 1942); Faber v. Sweet Style Manufacturing Corp., supra at 766; 1 Restatement, Contracts 2d, supra, Illustration 1(c) (1981). In 6(...continued) Commissioner, 101 T.C. 374, 384 (1993) (Form 872-A), affd. without published opinion 40 F.3d 385 (5th Cir. 19
ernal Revenue Code, as amended, defined "required interest" for purposes of subsection 819 as: the sum of the products obtained by multiplying-- (A) each rate of interest required, or assumed by the taxpayer, in calculating the reserves described in section 810(c) by (continued...) - 44 - (applying from years 1959 through 1983) and 813 of the Internal Revenue Code of 1954, as amended, and section 813 of the Internal Revenue Code of 198614 (applying from years 1984 through 1987).
809(a)(2) of the 1954 Internal Revenue Code, as amended, defined “required interest” for purposes of subsection 819 as: the sum of the products obtained by multiplying— (A) each rate of interest required, or assumed by the taxpayer, in calculating the reserves described in section 810(c) by (B) the means of the amount of such reserves computed at that rate at the beginning and end of the taxable year.