§812 — Definition of company’s share and policyholder’s share
144 citing cases
Statute Text — 26 U.S.C. §812
For purposes of section 805(a)(4), the term “company’s share” means, with respect to any taxable year beginning after December 31, 2017, 70 percent.
For purposes of section 807, the term “policyholder’s share” means, with respect to any taxable year beginning after December 31, 2017, 30 percent.
Treasury Regulations
-
Treas. Reg. §1.812-1Taxable years affected
Sections 1.812-2 through 1.812-8, except as otherwise provided therein, are applicable only to taxable years beginning after December 31, 1957, and all references to sections of part I, subchapter L, chapter 1 of the Code are to the Internal Revenue Code of 1954, as amended by the Life Insurance Company Income Tax Act of 1959 (73 Stat. 112) and the Act of October 23, 1962 (76 Stat. 1134).
-
Treas. Reg. §1.812-2Operations loss deduction
(a) Allowance of deduction. Section 812 provides that a life insurance company shall be allowed a deduction in computing gain or loss from operations for any taxable year beginning after December 31, 1957, in an amount equal to the aggregate of the operations loss carryovers and operations loss carrybacks to such taxable year. This deduction is referred to as the operations loss deduction. The loss from operations (computed under section 809), is the basis for the computation of the operations loss carryovers and operations loss carrybacks and ultimately for the operations loss deduction itself. Section 809(e)(5) provides that the net operating loss deduction provided in section 172 shall not be allowed a life insurance company since the operations loss deduction provided in section 812 and this paragraph shall be allowed in lieu thereof.
(b) Steps in computation of operations loss deduction. The three steps to be taken in the ascertainment of the operations loss deduction for any taxable year beginning after December 31, 1957, are as follows:
(1) Compute the loss from operations for any preceding or succeeding taxable year from which a loss from operations may be carried over or carried back to such taxable year.
(2) Compute the operations loss carryovers to such taxable year from such preceding taxable years and the operations loss carrybacks to such taxable year from such succeeding taxable years.
(3) Add such operations loss carryovers and carrybacks in order to determine the operations loss deduction for such taxable year.
(c) Statement with tax return. Every life insurance company claiming an operations loss deduction for any taxable year shall file with its return for such year a concise statement setting forth the amount of the operations loss deduction claimed and all material and pertinent facts relative thereto, including a detailed schedule showing the computation of the operations loss deduction.
(d) Ascertainment of deduction dependent upon operations loss carryback. If a life insurance company is entitled in computing its operations loss deduction to a carryback which it is not able to ascertain at the time its return is due, it shall compute the operations loss deduction on its return without regard to such operations loss carryback. When the life insurance company ascertains the operations loss carryback, it may within the applicable period of limitations file a claim for credit or refund of the overpayment, if any, resulting from the failure to compute the operations loss deduction for the taxable year with the inclusion of such carryback; or it may file an application under the provisions of section 6411 for a tentative carryback adjustment.
(e) Law applicable to computations. The following rules shall apply to all taxable years beginning after December 31, 1957:
(1) In determining the amount of any operations loss carryback or carryover to any taxable year, the necessary computations involving any other taxable year shall be made under the law applicable to such other taxable year.
(2) The loss from operations for any taxable year shall be determined under the law applicable to that year without regard to the year to which it is to be carried and in which, in effect, it is to be deducted as part of the operations loss deduction.
(3) The amount of the operations loss deduction which shall be allowed for any taxable year shall be determined under the law applicable for that year.
(f) Special rules. For purposes of taxable years beginning after December 31, 1954, and before January 1, 1958:
(1) The amount of any:
(i) Loss from operations;
(ii) Operations loss carryback; and
(iii) Operations loss carryover
shall be computed as if part I, subchapter L, chapter 1 of the Code (as in effect for 1958) and section 381(c)(22) applied to such taxable years.
(2) A loss from operations (determined in accordance with the provisions of section 812(b)(1)(C) and this paragraph) for such taxable years shall in no way affect the tax liability of any life insurance company for such taxable years. However, such loss may, to the extent allowed as an operations loss carryover under section 812, affect the tax liability of a life insurance company for a taxable year beginning after December 31, 1957. For example, for the taxable year 1956, X, a life insurance company, has a loss from operations (determined in accordance with the provisions of section 812(b)(1)(C) and this paragraph). Such loss shall in no way affect X's tax liability for the taxable years 1956 (the year of the loss), 1955 (a year to which such loss shall be carried back), or 1957 (a year to which such loss shall be carried forward). However, to the extent allowed under section 812, any amount of the loss for 1956 remaining after such carryback and carryforward shall be taken into account in determining X's tax liability for taxable years beginning after December 31, 1957.
-
Treas. Reg. §1.812-2(a)Allowance of deduction.
Allowance of deduction. Section 812 provides that a life insurance company shall be allowed a deduction in computing gain or loss from operations for any taxable year beginning after December 31, 1957, in an amount equal to the aggregate of the operations loss carryovers and operations loss carrybacks to such taxable year. This deduction is referred to as the operations loss deduction. The loss from operations (computed under section 809), is the basis for the computation of the operations loss carryovers and operations loss carrybacks and ultimately for the operations loss deduction itself. Section 809(e)(5) provides that the net operating loss deduction provided in section 172 shall not be allowed a life insurance company since the operations loss deduction provided in section 812 and this paragraph shall be allowed in lieu thereof.
-
Treas. Reg. §1.812-2(b)Steps in computation of operations loss deduction.
Steps in computation of operations loss deduction. The three steps to be taken in the ascertainment of the operations loss deduction for any taxable year beginning after December 31, 1957, are as follows:
(1) Compute the loss from operations for any preceding or succeeding taxable year from which a loss from operations may be carried over or carried back to such taxable year.
(2) Compute the operations loss carryovers to such taxable year from such preceding taxable years and the operations loss carrybacks to such taxable year from such succeeding taxable years.
(3) Add such operations loss carryovers and carrybacks in order to determine the operations loss deduction for such taxable year.
-
Treas. Reg. §1.812-2(c)Statement with tax return.
Statement with tax return. Every life insurance company claiming an operations loss deduction for any taxable year shall file with its return for such year a concise statement setting forth the amount of the operations loss deduction claimed and all material and pertinent facts relative thereto, including a detailed schedule showing the computation of the operations loss deduction.
-
Treas. Reg. §1.812-2(d)Ascertainment of deduction dependent upon operations loss carryback.
Ascertainment of deduction dependent upon operations loss carryback. If a life insurance company is entitled in computing its operations loss deduction to a carryback which it is not able to ascertain at the time its return is due, it shall compute the operations loss deduction on its return without regard to such operations loss carryback. When the life insurance company ascertains the operations loss carryback, it may within the applicable period of limitations file a claim for credit or refund of the overpayment, if any, resulting from the failure to compute the operations loss deduction for the taxable year with the inclusion of such carryback; or it may file an application under the provisions of section 6411 for a tentative carryback adjustment.
-
Treas. Reg. §1.812-2(e)Law applicable to computations.
Law applicable to computations. The following rules shall apply to all taxable years beginning after December 31, 1957:
(1) In determining the amount of any operations loss carryback or carryover to any taxable year, the necessary computations involving any other taxable year shall be made under the law applicable to such other taxable year.
(2) The loss from operations for any taxable year shall be determined under the law applicable to that year without regard to the year to which it is to be carried and in which, in effect, it is to be deducted as part of the operations loss deduction.
(3) The amount of the operations loss deduction which shall be allowed for any taxable year shall be determined under the law applicable for that year.
-
Treas. Reg. §1.812-2(f)Special rules.
Special rules. For purposes of taxable years beginning after December 31, 1954, and before January 1, 1958:
(1) The amount of any:
-
Treas. Reg. §1.812-2(i)§1.812-2(i)
Loss from operations;
(ii) Operations loss carryback; and
(iii) Operations loss carryover
shall be computed as if part I, subchapter L, chapter 1 of the Code (as in effect for 1958) and section 381(c)(22) applied to such taxable years.
(2) A loss from operations (determined in accordance with the provisions of section 812(b)(1)(C) and this paragraph) for such taxable years shall in no way affect the tax liability of any life insurance company for such taxable years. However, such loss may, to the extent allowed as an operations loss carryover under section 812, affect the tax liability of a life insurance company for a taxable year beginning after December 31, 1957. For example, for the taxable year 1956, X, a life insurance company, has a loss from operations (determined in accordance with the provisions of section 812(b)(1)(C) and this paragraph). Such loss shall in no way affect X's tax liability for the taxable years 1956 (the year of the loss), 1955 (a year to which such loss shall be carried back), or 1957 (a year to which such loss shall be carried forward). However, to the extent allowed under section 812, any amount of the loss for 1956 remaining after such carryback and carryforward shall be taken into account in determining X's tax liability for taxable years beginning after December 31, 1957.
-
Treas. Reg. §1.812-3Computation of loss from operations
(a) Modification of deductions. A loss from operations is sustained by a life insurance company in any taxable year, if and to the extent that, for such year, there is an excess of the sum of the deductions provided by section 809(d) over the sum of (1) the life insurance company's share of each and every item of investment yield (including tax-exempt interest, partially tax-exempt interest, and dividends received) as determined under section 809(b)(3), and (2) the sum of the items of gross amount taken into account under section 809(c). In determining the loss from operations for purposes of section 812:
(i) No deduction shall be allowed under section 812 for the operations loss deduction.
(ii) The 85 percent limitation on dividends received provided by section 246 (b) as modified by section 809(d)(8)(B) shall not apply to the deductions otherwise allowed under:
(a) Section 243(a) in respect to dividends received by corporations,
(b) Section 244 in respect of dividends received on certain preferred stock of public utilities, and
(c) Section 245 in respect of dividends received from certain foreign corporations.
(b) Illustration of principles. The application of paragraph (a) of this section may be illustrated by the following example:
-
Treas. Reg. §1.812-3(a)§1.812-3(a)
Section 243(a) in respect to dividends received by corporations,
-
Treas. Reg. §1.812-3(b)Illustration of principles.
Illustration of principles. The application of paragraph (a) of this section may be illustrated by the following example:
-
Treas. Reg. §1.812-3(c)Section 245 in respect of dividends received from certain foreign corporations.
Section 245 in respect of dividends received from certain foreign corporations.
-
Treas. Reg. §1.812-3(i)No deduction shall be allowed under section 812 for the operations loss deduction.
No deduction shall be allowed under section 812 for the operations loss deduction.
(ii) The 85 percent limitation on dividends received provided by section 246 (b) as modified by section 809(d)(8)(B) shall not apply to the deductions otherwise allowed under:
-
Treas. Reg. §1.812-4Operations loss carrybacks and operations loss carryovers
(a) In general—(1) Years to which loss may be carried. In order to compute the operations loss deduction of a life insurance company the company must first determine the part of any losses from operations for any preceding or succeeding taxable years which are carryovers or carrybacks to the taxable year in issue. Except as otherwise provided by this paragraph, a loss from operations for taxable years beginning after December 31, 1954, shall be carried back to each of the 3 taxable years preceding the loss year and shall be carried forward to each of the 5 taxable years succeeding the loss year. Except as limited by section 812(e)(2) and paragraph (b) of § 1.812-6, if the life insurance company is a new company (as defined in section 812(e)(1)) for the loss year, the loss from operations shall be carried back to each of the 3 taxable years preceding the loss year and shall be carried forward to each of the 8 taxable years succeeding the loss year. In determining the span of years for which a loss from operations may be carried, taxable years in which a company does not qualify as a life insurance company (as defined in section 801(a)), or is not treated as a new company, shall be taken into account.
(2) Special transitional rules. (i) A loss from operations for any taxable year beginning before January 1, 1958, shall not be carried back to any taxable year beginning before January 1, 1955. Furthermore, a loss from operations for any taxable year beginning after December 31, 1957, shall not be carried back to any taxable year beginning before January 1, 1958.
(ii) If for any taxable year a life insurance company has made an election under section 810(e) (relating to certain decreases in reserves for voluntary employees' beneficiary associations) which is effective for such taxable year, the provisions of section 812(b)(1) and subparagraph (1) of this paragraph shall not apply with respect to any loss from operations for any taxable year beginning before January 1, 1958.
(3) Illustration of principles. The provisions of section 812(b)(1) and of this paragraph may be illustrated by the following examples:
(4) Periods of less than 12 months. A fractional part of a year which is a taxable year under sections 441(b) and 7701(a)(23) is a preceding or a succeeding taxable year for the purpose of determining under section 812 the first, second, etc., preceding or succeeding taxable year. For the determination of the loss from operations for periods of less than 12 months, see section 818(d) and the regulations thereunder.
(5) Amount of loss to be carried. The amount which is carried back or carried over to any taxable year is the loss from operations to the extent it was not absorbed in the computation of gain from operations for other taxable years, preceding such taxable year, to which it may be carried back or carried over. For the purpose of determining the gain from operations for any such preceding taxable year, the various operations loss carryovers and carrybacks to such taxable year are considered to be applied in reduction of the gain from operations in the order of the taxable years from which such losses are carried over or carried back, beginning with the loss for the earliest taxable year.
(6) Corporate acquisitions. For the computation of the operations loss carryovers in the case of certain acquisitions of the assets of a life insurance company by another life insurance company, see section 381(c)(22) and the regulations thereunder.
(b) Portion of loss from operations which is a carryback or a carryover to the taxable year in issue—(1) Manner of computation. (i) A loss from operations shall first be carried back to the earliest taxable year permissible under section 812(b) and paragraph (a) of this section for which such loss is allowable as a carryback or a carryover. The entire amount of the loss from operation shall be carried back to such earliest year.
(ii) Section 812(b)(2) provides that the portion of the loss from operations which shall be carried to each of the taxable years subsequent to the earliest taxable year shall be the excess (if any) of the amount of the loss from operations over the sum of the offsets (as defined in section 812(d) and paragraph (a) of § 1.812-5) for all prior taxable years to which the loss from operations may be carried.
(2) Illustration of principles. The application of this paragraph may be illustrated by the following example:
-
Treas. Reg. §1.812-4(a)In general—(1) Years to which loss may be carried.
In general—(1) Years to which loss may be carried. In order to compute the operations loss deduction of a life insurance company the company must first determine the part of any losses from operations for any preceding or succeeding taxable years which are carryovers or carrybacks to the taxable year in issue. Except as otherwise provided by this paragraph, a loss from operations for taxable years beginning after December 31, 1954, shall be carried back to each of the 3 taxable years preceding the loss year and shall be carried forward to each of the 5 taxable years succeeding the loss year. Except as limited by section 812(e)(2) and paragraph (b) of § 1.812-6, if the life insurance company is a new company (as defined in section 812(e)(1)) for the loss year, the loss from operations shall be carried back to each of the 3 taxable years preceding the loss year and shall be carried forward to each of the 8 taxable years succeeding the loss year. In determining the span of years for which a loss from operations may be carried, taxable years in which a company does not qualify as a life insurance company (as defined in section 801(a)), or is not treated as a new company, shall be taken into account.
(2) Special transitional rules. (i) A loss from operations for any taxable year beginning before January 1, 1958, shall not be carried back to any taxable year beginning before January 1, 1955. Furthermore, a loss from operations for any taxable year beginning after December 31, 1957, shall not be carried back to any taxable year beginning before January 1, 1958.
(ii) If for any taxable year a life insurance company has made an election under section 810(e) (relating to certain decreases in reserves for voluntary employees' beneficiary associations) which is effective for such taxable year, the provisions of section 812(b)(1) and subparagraph (1) of this paragraph shall not apply with respect to any loss from operations for any taxable year beginning before January 1, 1958.
(3) Illustration of principles. The provisions of section 812(b)(1) and of this paragraph may be illustrated by the following examples:
(4) Periods of less than 12 months. A fractional part of a year which is a taxable year under sections 441(b) and 7701(a)(23) is a preceding or a succeeding taxable year for the purpose of determining under section 812 the first, second, etc., preceding or succeeding taxable year. For the determination of the loss from operations for periods of less than 12 months, see section 818(d) and the regulations thereunder.
(5) Amount of loss to be carried. The amount which is carried back or carried over to any taxable year is the loss from operations to the extent it was not absorbed in the computation of gain from operations for other taxable years, preceding such taxable year, to which it may be carried back or carried over. For the purpose of determining the gain from operations for any such preceding taxable year, the various operations loss carryovers and carrybacks to such taxable year are considered to be applied in reduction of the gain from operations in the order of the taxable years from which such losses are carried over or carried back, beginning with the loss for the earliest taxable year.
(6) Corporate acquisitions. For the computation of the operations loss carryovers in the case of certain acquisitions of the assets of a life insurance company by another life insurance company, see section 381(c)(22) and the regulations thereunder.
-
Treas. Reg. §1.812-4(b)Portion of loss from operations which is a carryback or a carryover to the taxable year in issue—(1) Manner of computation.
Portion of loss from operations which is a carryback or a carryover to the taxable year in issue—(1) Manner of computation. (i) A loss from operations shall first be carried back to the earliest taxable year permissible under section 812(b) and paragraph (a) of this section for which such loss is allowable as a carryback or a carryover. The entire amount of the loss from operation shall be carried back to such earliest year.
(ii) Section 812(b)(2) provides that the portion of the loss from operations which shall be carried to each of the taxable years subsequent to the earliest taxable year shall be the excess (if any) of the amount of the loss from operations over the sum of the offsets (as defined in section 812(d) and paragraph (a) of § 1.812-5) for all prior taxable years to which the loss from operations may be carried.
(2) Illustration of principles. The application of this paragraph may be illustrated by the following example:
-
Treas. Reg. §1.812-5Offset
(a) Offset defined. Section 812(d) defines the term “offset” for purposes of section 812(b)(2) and paragraph (b)(1)(ii) of § 1.812-4. For any taxable year the offset is only that portion of the increase in the operations loss deduction for the taxable year which is necessary to reduce the life insurance company taxable income (computed without regard to section 802(b)(3)) for such year to zero. For purposes of the preceding sentence, the offset shall be determined with the modifications prescribed in paragraph (b) of this section. Such modifications shall be made independently of, and without reference to, the modifications required by paragraph (a) of § 1.812-3 for purposes of computing the loss from operations itself.
(b) Modifications—(1) Operations loss deduction—(i) In general. Section 812(d)(2) provides that for purposes of section 812(d)(1) (relating to the definition of offset), the operations loss deduction for any taxable year shall be computed by taking into account only such losses from operations otherwise allowable as carryovers or as carrybacks to such taxable year as were sustained in taxable years preceding the taxable year in which the life insurance company sustained the loss from operations from which the offset is to be deducted. Thus, for such purposes the loss from operations for the loss year or for any taxable year thereafter shall not be taken into account.
(ii) Illustration of principles. The provisions of this subparagraph may be illustrated by the following example:
(2) Recomputation of deductions limited by section 809(f)—(i) In general. If in any taxable year a life insurance company has deductions under section 809(d) (3), (5), and (6), as limited by section 809(f), and sustains a loss from operations in a succeeding taxable year which may be carried back as an operations loss deduction, such limitation and deductions shall be recomputed. This recomputation is required since the carryback must be taken into account for purposes of determining such limitation and deductions.
(ii) Illustration of principles. The provisions of this subparagraph may be illustrated by the following example:
(a) Facts. The books of P, a life insurance company, reveal the following facts:
The gain from operations thus shown is computed without regard to any operations loss deduction or deductions under section 809(d) (3), (5), and (6), as limited by section 809(f). Assume that for the taxable year 1959, P has (without regard to the limitation of section 809(f) or the operations loss deduction for 1959) a deduction under section 809(d)(3) of $2,500,000 for dividends to policyholders and no deductions under section 809(d) (5) or (6).
(b) Determination of section 809(f) limitation and deduction for dividends to policyholders without regard to the operations loss deduction for 1959. In order to determine gain or loss from operations for 1959, P must determine the deduction for dividends to policyholders for such year. Under the provisions of section 809(f), the amount of such deduction shall not exceed the sum of (1) the amount (if any) by which the gain from operations for such year (determined without regard to such deduction) exceeds P's taxable investment income for such year, plus (2) $250,000. Since the gain from operations as thus determined ($10,000,000) exceeds the taxable investment income ($9,000,000) by $1,000,000, the limitation on such deduction is $1,250,000 ($1,000,000 plus $250,000). Accordingly, only $1,250,000 of the $2,500,000 deduction for dividends to policyholders shall be allowed. The gain from operations for such year is $8,750,000 ($10,000,000 minus $1,250,000).
(c) Recomputation of section 809(f) limitation and deduction for dividends to policyholders after application of the operations loss deduction for 1959. Since P has sustained a loss from operations for 1960 which shall be carried back to 1959 as an operations loss deduction, it must recompute the section 809(f) limitation and deduction for dividends to policyholders. Taking into account the $9,800,000 operations loss deduction for 1959 reduces gain from operations for such year to $200,000 ($10,000,000 minus $9,800,000). Since the gain from operations as thus determined ($200,000) is less than the taxable investment income ($9,000,000), the limitation on the deduction for dividends to policyholders is $250,000. Thus, only $250,000 of the $2,500,000 deduction for dividends to policyholders shall be allowed. The gain from operations for such year as thus determined is $9,750,000 ($10,000,000 minus $250,000) since for purposes of this determination the operations loss deduction for 1959 is not taken into account (see section 812(c)(1)). Accordingly, the offset for 1959 is $9,750,000 (the increase in the operations loss deduction for 1959, computed without regard to the carryback for 1960, which reduces life insurance company taxable income for 1959 to zero); thus, the portion of the 1960 loss from operations which shall be carried forward to 1961 is $50,000 (the excess of the 1960 loss ($9,800,000) over the offset for 1959 ($9,750,000)).
(3) Minimum limitation. The life insurance company taxable income, as modified under this paragraph, shall in no case be considered less than zero.
-
Treas. Reg. §1.812-5(a)Facts.
Facts. The books of P, a life insurance company, reveal the following facts:
The gain from operations thus shown is computed without regard to any operations loss deduction or deductions under section 809(d) (3), (5), and (6), as limited by section 809(f). Assume that for the taxable year 1959, P has (without regard to the limitation of section 809(f) or the operations loss deduction for 1959) a deduction under section 809(d)(3) of $2,500,000 for dividends to policyholders and no deductions under section 809(d) (5) or (6).
-
Treas. Reg. §1.812-5(b)Determination of section 809(f) limitation and deduction for dividends to policyholders without regard to the operations loss deduction for 1959.
Determination of section 809(f) limitation and deduction for dividends to policyholders without regard to the operations loss deduction for 1959. In order to determine gain or loss from operations for 1959, P must determine the deduction for dividends to policyholders for such year. Under the provisions of section 809(f), the amount of such deduction shall not exceed the sum of (1) the amount (if any) by which the gain from operations for such year (determined without regard to such deduction) exceeds P's taxable investment income for such year, plus (2) $250,000. Since the gain from operations as thus determined ($10,000,000) exceeds the taxable investment income ($9,000,000) by $1,000,000, the limitation on such deduction is $1,250,000 ($1,000,000 plus $250,000). Accordingly, only $1,250,000 of the $2,500,000 deduction for dividends to policyholders shall be allowed. The gain from operations for such year is $8,750,000 ($10,000,000 minus $1,250,000).
-
Treas. Reg. §1.812-5(c)Recomputation of section 809(f) limitation and deduction for dividends to policyholders after application of the operations loss deduction for 1959.
Recomputation of section 809(f) limitation and deduction for dividends to policyholders after application of the operations loss deduction for 1959. Since P has sustained a loss from operations for 1960 which shall be carried back to 1959 as an operations loss deduction, it must recompute the section 809(f) limitation and deduction for dividends to policyholders. Taking into account the $9,800,000 operations loss deduction for 1959 reduces gain from operations for such year to $200,000 ($10,000,000 minus $9,800,000). Since the gain from operations as thus determined ($200,000) is less than the taxable investment income ($9,000,000), the limitation on the deduction for dividends to policyholders is $250,000. Thus, only $250,000 of the $2,500,000 deduction for dividends to policyholders shall be allowed. The gain from operations for such year as thus determined is $9,750,000 ($10,000,000 minus $250,000) since for purposes of this determination the operations loss deduction for 1959 is not taken into account (see section 812(c)(1)). Accordingly, the offset for 1959 is $9,750,000 (the increase in the operations loss deduction for 1959, computed without regard to the carryback for 1960, which reduces life insurance company taxable income for 1959 to zero); thus, the portion of the 1960 loss from operations which shall be carried forward to 1961 is $50,000 (the excess of the 1960 loss ($9,800,000) over the offset for 1959 ($9,750,000)).
(3) Minimum limitation. The life insurance company taxable income, as modified under this paragraph, shall in no case be considered less than zero.
-
Treas. Reg. §1.812-6New company defined
Section 812(e) provides that for purposes of part I, subchapter L, chapter 1 of the Code, a life insurance company is a “new company” for any taxable year only if such taxable year begins not more than 5 years after the first day on which it (or any predecessor if section 381(c)(22) applies or would have applied if in effect) was authorized to do business as an insurance company.
-
Treas. Reg. §1.812-7Application of subtitle A and subtitle F
Section 812(f) provides that except as modified by section 809(e) (relating to modifications of deduction items otherwise allowable under subtitle A of the Code) subtitles A and F of the Code shall apply to operations loss carrybacks and carryovers, and to the operations loss deduction, in the same manner and to the same extent that such subtitles apply in respect of net operation loss carrybacks, net operating loss carryovers, and the net operating loss deduction of corporations generally. For the computation of the operations loss carrybacks and carryovers, and of the operations loss deduction in the case of certain acquisitions of the assets of a life insurance company by another life insurance company, see section 381(c)(22) and the regulations thereunder.
-
Treas. Reg. §1.812-8Illustration of operations loss carrybacks and carryovers
The application of § 1.812-4 may be illustrated by the following example:
(a) Facts. The books of M, a life insurance company, organized in 1940, reveal the following facts:
The gain from operations thus shown is computed without regard to any operations loss deduction. The assumption is also made that none of the other modifications prescribed in paragraph (b) of § 1.812-5 apply. There are no losses from operations for 1955, 1956, 1957, 1968, 1969, 1970.
(b) Loss sustained in 1960. The portions of the $75,000 loss from operations for 1960 which shall be used as carrybacks to 1958 and 1959 and as carryovers to 1961, 1962, 1963, 1964, and 1965 are computed as follows:
(1) Carryback to 1958. The carryback to this year is $75,000, that is, the amount of the loss from operations.
(2) Carryback to 1959. The carryback to this year is $60,000 (the excess of the loss for 1960 over the offset for 1958), computed as follows:
(3) Carryover to 1961. The carryover to this year is $30,000 (the excess, if any, of the loss for 1960 over the sum of the offsets for 1958 and 1959), computed as follows:
(4) Carryover to 1962. The carryover to this year is $10,000 (the excess, if any, of the loss for 1960 over the sum of the offsets for 1958, 1959, and 1961), computed as follows:
(5) Carryover to 1963. The carryover to this year is $10,000 (the excess, if any, of the loss for 1960 over the sum of the offsets for 1958, 1959, 1961, and 1962), computed as follows:
(6) Carryover to 1964. The carryover to this year is $0 (the excess, if any, of the loss from 1960 over the sum of the offsets for 1958, 1959, 1961, 1962, and 1963), computed as follows:
(7) Carryover to 1965. The carryover to this year is $0 (the excess, if any, of the loss from 1960 over the sum of the offsets for 1958, 1959, 1961, 1962, 1963, and 1964), computed as follows:
(c) Loss sustained in 1962. The portions of the $150,000 loss from operations for 1962 which shall be used as carrybacks to 1959, 1960, and 1961 and as carryovers to 1963, 1964, 1965, 1966, and 1967 are computed as follows:
(1) Carryback to 1959. The carryback to this year is $150,000, that is, the amount of the loss from operations.
(2) Carryback to 1960. The carryback to this year is $150,000 (the excess, if any, of the loss from 1962 over the offset for 1959), computed as follows:
(3) Carryback to 1961. The carryback to this year is $150,000 (the excess, if any, of the loss from 1962 over the sum of the offsets for 1959 and 1960), computed as follows:
(4) Carryover to 1963. The carryover to this year is $150,000 (the excess, if any, of the loss from 1962 over the sum of the offsets for 1959, 1960, and 1961), computed as follows:
(5) Carryover to 1964. The carryover to this year is $130,000 (the excess, if any, of the loss from 1962 over the sum of the offsets for 1959, 1960, 1961, and 1963), computed as follows:
(6) Carryover to 1965. The carryover to this year is $95,000 (the excess, if any, of the loss from 1962 over the sum of the offsets for 1959, 1960, 1961, 1963, and 1964), computed as follows:
(7) Carryover to 1966. The carryover to this year is $20,000 (the excess, if any, of the loss from 1962 over the sum of the offsets for 1959, 1960, 1961, 1963, 1964, and 1965), computed as follows:
(8) Carryover to 1967. The carryover to this year is $3,000 (the excess, if any, of the loss from 1962 over the sum of the offsets for 1959, 1960, 1961, 1963, 1964, 1965, and 1966), computed as follows:
(d) Determination of operations loss deduction for each year. The carryovers and carrybacks computed under paragraphs (b) and (c) of this section are used as a basis for the computation of the operations loss deduction in the following manner:
-
Treas. Reg. §1.812-8(a)Facts.
Facts. The books of M, a life insurance company, organized in 1940, reveal the following facts:
The gain from operations thus shown is computed without regard to any operations loss deduction. The assumption is also made that none of the other modifications prescribed in paragraph (b) of § 1.812-5 apply. There are no losses from operations for 1955, 1956, 1957, 1968, 1969, 1970.
144 Citing Cases
Many marijuana businesses have tried to argue their way out of section 280E, but all have been unsuccessful. See Patients Mut. Assistance Collective Corp. v. Commissioner, 151 T.C. 176 (2018) (reiterating applicability of section 280E to state-legal drug sellers), aff’d, 995 F.3d 671 (9th Cir. 2021); see also Olive v. Commissioner, 139 T.C.
280E impose exactions for violations ofcriminal laws, which is inapposite to Congress' remedial goal to deter noncompliance in other provisions ofthe Code in their effort to protect the revenue.
This means that under federal law the manufacture, distribution, dispensation, or possession ofmarijuana--even medical marijuana recommended by a physician--is prohibited. See 4 sec. 841(a); Californians Helping to Alleviate Med. Problems, Inc. v. Commissioner (CHAMP), 128 T.C. 173, 181 (2007)(citing United States v. Oakland Canna
Section 261, however, provides that "[i]n computing taxable income, no deduction shall in any case be allowed in respect ofthe items specified in this part." "[T]his part" includes section 280E, Expenditures in Connection With the Illegal Sale ofDrugs.
Section 261, however, provides that "[i]n computing taxable income, no deduction shall in any case be allowed in respect ofthe items specified in this part." "[T]his part" includes section 280E, Expenditures in Connection With the Illegal Sale ofDrugs.
Section 261, however, provides that "[i]n computing taxable income, no deduction shall in any case be allowed in respect ofthe items specified in this part." "[T]his part" includes section 280E, Expenditures in Connection With the Illegal Sale ofDrugs.
Section 261, however, provides that "[i]n computing taxable income, no deduction shall in any case be allowed in respect ofthe items specified in this part." "[T]his part" includes section 280E, Expenditures in Connection With the Illegal Sale ofDrugs.
Section 261, however, provides that "[i]n computing taxable income, no deduction shall in any case be allowed in respect ofthe items specified in this part." "[T]his part" includes section 280E, Expenditures in Connection With the Illegal Sale ofDrugs.
Section 261, however, provides that "[i]n computing taxable income, no deduction shall in any case be allowed in respect ofthe items specified in this part." "[T]his part" includes section 280E, Expenditures in Connection With the Illegal Sale ofDrugs.
This means that under federal law the manufacture, distribution, dispensation, or possession ofmarijuana--even medical marijuana recommended by a physician--is prohibited. See 4 sec. 841(a); Californians Helping to Alleviate Med. Problems, Inc. v. Commissioner (CHAMP), 128 T.C. 173, 181 (2007)(citing United States v. Oakland Canna
This means that under federal law the manufacture, distribution, dispensation, or possession ofmarijuana--even medical marijuana recommended by a physician--is prohibited. See 4 sec. 841(a); Californians Helping to Alleviate Med. Problems, Inc. v. Commissioner (CHAMP), 128 T.C. 173, 181 (2007)(citing United States v. Oakland Canna
812.014(1) (West 2011). A person "obtains or uses" property by either "[t]aking or exercising control," "[m]aking any unauthorized use, disposition or transfer," obtaining the property "by fraud, willful misrepresentation ofa future act, or false promise," or engaging in conduct previously known as embezzlement or other conduct similar in natu
812.014(2) (a)1., in connection with the mismanagement of client funds. On December 17, 2004, he was sentenced to 5 years' incarceration, 10 years' probation, 1,000 hours of community service, and a restitution payment of $357,000 to his clients. On March 2, 2005, petitioner began his period of incarceration; on March 11, 2009, he was released
t" in response do the regulation. See Pension Protection Act of 2006, Pub.t| L. 109-280, sec. 1219, 120 Stat.s 1083,; 'Gulf Opportunity Zone ct of 2005,e Pub. L. 109-135, sec. 403, 119 Stat. 2615; Americ n Jobs Creation Act of 2004, Pub. L. 108-357, sec. 812, 118 Stat 1577. The Secretary has folldwed Congress' intent to carve out a specialized set of rules fo the penalties applicable to the accuracy of a return. The application of the regulation is by its terms specifically limi ed to underpayme
2002), and in most other States, see 1 Restatement, Contracts 2d, sec. 15 (1981), although a “compulsion” or “irresistible impulse” standard has been applied on occasion, see Faber v. Sweet Style Manufacturing Corp., 242 N.Y.S.2d 763 (Sup. Ct. 1963). Undue influence, taking advantage of a contracting party’s impaired ability to
We note also that the term “private stockholder or individual” appears in paragraph (2) of section 2055(a) (and its 1939 Code predecessor, section 812(d)), while the term “private shareholder or individual” appears in paragraph (4) of the same section 2055(a).