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26 U.S.C. § 817 — Treatment of variable contracts
Federal law — U.S. Code and appendices · legal_authorities
**(a) Increases and decreases in reserves** For purposes of subsections (a) and (b) of section 807, the sum of the items described in section 807(c) taken into account as of the close of the taxable year with respect to any variable contract shall, under regulations prescribed by the Secretary, be adjusted—
(1) by subtracting therefrom an amount equal to the sum of the amounts added from time to time (for the taxable year) to the reserves separately accounted for in accordance with subsection (c) by reason of appreciation in value of assets (whether or not the assets have been disposed of), and
(2) by adding thereto an amount equal to the sum of the amounts subtracted from time to time (for the taxable year) from such reserves by reason of depreciation in value of assets (whether or not the assets have been disposed of).
The deduction allowable for items described in paragraphs (1) and (6) of section 805(a) with respect to variable contracts shall be reduced to the extent that the amount of such items is increased for the taxable year by appreciation (or increased to the extent that the amount of such items is decreased for the taxable year by depreciation) not reflected in adjustments under the preceding sentence.
**(b) Adjustment to basis of assets held in segregated asset account** In the case of variable contracts, the basis of each asset in a segregated asset account shall (in addition to all other adjustments to basis) be—
(1) increased by the amount of any appreciation in value, and
(2) decreased by the amount of any depreciation in value,
to the extent such appreciation and depreciation are from time to time reflected in the increases and decreases in reserves or other items referred to in subsection (a) with respect to such contracts.
**(c) Separate accou
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Source location: Title 26, Chapter 1, § 817; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Increases and decreases in reserves** For purposes of subsections (a) and (b) of section 807, the sum of the items described in section 807(c) taken into account as of the close of the taxable year with respect to any variable contract shall, under regulations prescribed by the Secretary, be adjusted—
(1) by subtracting therefrom an amount equal to the sum of the amounts added from time to time (for the taxable year) to the reserves separately accounted for in accordance with subsection (c) by reason of appreciation in value of assets (whether or not the assets have been disposed of), and
(2) by adding thereto an amount equal to the sum of the amounts subtracted from time to time (for the taxable year) from such reserves by reason of depreciation in value of assets (whether or not the assets have been disposed of).
The deduction allowable for items described in paragraphs (1) and (6) of section 805(a) with respect to variable contracts shall be reduced to the extent that the amount of such items is increased for the taxable year by appreciation (or increased to the extent that the amount of such items is decreased for the taxable year by depreciation) not reflected in adjustments under the preceding sentence.
**(b) Adjustment to basis of assets held in segregated asset account** In the case of variable contracts, the basis of each asset in a segregated asset account shall (in addition to all other adjustments to basis) be—
(1) increased by the amount of any appreciation in value, and
(2) decreased by the amount of any depreciation in value,
to the extent such appreciation and depreciation are from time to time reflected in the increases and decreases in reserves or other items referred to in subsection (a) with respect to such contracts.
**(c) Separate accounting** For purposes of this part, a life insurance company which issues variable contracts shall separately account for the various income, exclusion, deduction, asset, reserve, and other liability items properly attributable to such variable contracts. For such items as are not accounted for directly, separate accounting shall be made—
(1) in accordance with the method regularly employed by such company, if such method is reasonable, and
(2) in all other cases, in accordance with regulations prescribed by the Secretary.
**(d) Variable contract defined** For purposes of this part, the term “variable contract” means a contract—
(1) which provides for the allocation of all or part of the amounts received under the contract to an account which, pursuant to State law or regulation, is segregated from the general asset accounts of the company,
(2) which—
(A) provides for the payment of annuities,
(B) is a life insurance contract, or
(C) provides for funding of insurance on retired lives as described in section 807(c)(6), and
(3) under which—
(A) in the case of an annuity contract, the amounts paid in, or the amount paid out, reflect the investment return and the market value of the segregated asset account,
(B) in the case of a life insurance contract, the amount of the death benefit (or the period of coverage) is adjusted on the basis of the investment return and the market value of the segregated asset account, or
(C) in the case of funds held under a contract described in paragraph (2)(C), the amounts paid in, or the amounts paid out, reflect the investment return and the market value of the segregated asset account.
If a contract ceases to reflect current investment return and current market value, such contract shall not be considered as meeting the requirements of paragraph (3) after such cessation. Paragraph (3) shall be applied without regard to whether there is a guarantee, and obligations under such guarantee which exceed obligations under the contract without regard to such guarantee shall be accounted for as part of the company’s general account.
**(e) Pension plan contracts treated as paying annuity** A pension plan contract which is not a life, accident, or health, property, casualty, or liability insurance contract shall be treated as a contract which provides for the payments of annuities for purposes of subsection (d).
**(f) Other special rules**
(1) **Life insurance reserves** — For purposes of subsection (b)(1)(A) of section 816, the reflection of the investment return and the market value of the segregated asset account shall be considered an assumed rate of interest.
(2) **Additional separate computations** — Under regulations prescribed by the Secretary, such additional separate computations shall be made, with respect to the items separately accounted for in accordance with subsection (c), as may be necessary to carry out the purposes of this section and this part.
**(g) Variable annuity contracts treated as annuity contracts** For purposes of this part, the term “annuity contract” includes a contract which provides for the payment of a variable annuity computed on the basis of—
(1) recognized mortality tables, and
(2)
(A) the investment experience of a segregated asset account, or
(B) the company-wide investment experience of the company.
Paragraph (2)(B) shall not apply to any company which issues contracts which are not variable contracts.
**(h) Treatment of certain nondiversified contracts**
(1) **In general** — For purposes of subchapter L, section 72 (relating to annuities), and section 7702(a) (relating to definition of life insurance contract), a variable contract (other than a pension plan contract) which is otherwise described in this section and which is based on a segregated asset account shall not be treated as an annuity, endowment, or life insurance contract for any period (and any subsequent period) for which the investments made by such account are not, in accordance with regulations prescribed by the Secretary, adequately diversified.
(2) **Safe harbor for diversification** — A segregated asset account shall be treated as meeting the requirements of paragraph (1) for any quarter of a taxable year if as of the close of such quarter—
(A) it meets the requirements of section 851(b)(3), and
(B) no more than 55 percent of the value of the total assets of the account are assets described in section 851(b)(3)(A)(i).
(3) **Special rule for investments in United States obligations** — To the extent that any segregated asset account with respect to a variable life insurance contract is invested in securities issued by the United States Treasury, the investments made by such account shall be treated as adequately diversified for purposes of paragraph (1).
(4) **Look-through in certain cases** — For purposes of this subsection, if all of the beneficial interests in a regulated investment company or in a trust are held by 1 or more—
(A) insurance companies (or affiliated companies) in their general account or in segregated asset accounts, or
(B) fund managers (or affiliated companies) in connection with the creation or management of the regulated investment company or trust,
the diversification requirements of paragraph (1) shall be applied by taking into account the assets held by such regulated investment company or trust.
(5) **Independent investment advisors permitted** — Nothing in this subsection shall be construed as prohibiting the use of independent investment advisors.
(6) **Government securities funds** — In determining whether a segregated asset account is adequately diversified for purposes of paragraph (1), each United States Government agency or instrumentality shall be treated as a separate issuer.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Tax imposed** A tax is hereby imposed for each taxable year on the life insurance company taxable income of every life insurance company. Such tax shall consist of a tax computed as provided in section 11 as though the life insurance company taxable income were the taxable income referred to in section 11.
**(b) Life insurance company taxable income** For purposes of this part, the term “life insurance company taxable income” means—
(1) life insurance gross income, reduced by
(2) life insurance deductions.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 801
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Energy credit**
(1) **In general** — For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year.
(2) **Energy percentage**
(A) *In general* — Except as provided in paragraphs (6) and (7), the energy percentage is—
(i) 6 percent in the case of—
(I) qualified fuel cell property,
(II) energy property described in clause (i) or (iii) of paragraph (3)(A) but only with respect to property the construction of which begins before January 1, 2025,
(III) energy property described in paragraph (3)(A)(ii),
(IV) qualified small wind energy property,
(V) waste energy recovery property,
(VI) energy storage technology,
(VII) qualified biogas property,
(VIII) microgrid controllers, and
(IX) energy property described in clauses (v) and (vii) of paragraph (3)(A), and
(ii) in the case of any energy property to which clause (i) does not apply, 0 percent.
(B) *Coordination with rehabilitation credit* — The energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures.
(C) *Nonapplication of increases to energy percentage* — For purposes of energy property described in subparagraph (A)(ii), the energy percentage applicable to such property pursuant to such subparagraph shall not be increased or otherwise adjusted by any provision of this section.
(3) **Energy property** — For purposes of this subpart, the term “energy property” means any property—
(A) which is—
(i) equipment which uses solar energy to generate electricity, to he
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 48
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Decrease treated as gross income** If for any taxable year—
(1) the opening balance for the items described in subsection (c), exceeds
(2)
(A) the closing balance for such items, reduced by
(B) the amount of the policyholders’ share of tax-exempt interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies,
such excess shall be included in gross income under section 803(a)(2).
**(b) Increase treated as deduction** If for any taxable year—
(1)
(A) the closing balance for the items described in subsection (c), reduced by
(B) the amount of the policyholders’ share of tax-exempt interest and the amount of the policyholder’s share of the increase for the taxable year in policy cash values (within the meaning of section 805(a)(4)(F)) of life insurance policies and annuity and endowment contracts to which section 264(f) applies, exceeds
(2) the opening balance for such items,
such excess shall be taken into account as a deduction under section 805(a)(2).
**(c) Items taken into account** The items referred to in subsections (a) and (b) are as follows:
(1) The life insurance reserves (as defined in section 816(b)).
(2) The unearned premiums and unpaid losses included in total reserves under section 816(c)(2).
(3) The amounts (discounted at the appropriate rate of interest) necessary to satisfy the obligations under insurance and annuity contracts, but only if such obligations do not involve (at the time with respect to which the computation is made under this paragraph) life, accident, or health contingencies.
(4) Dividend accumulations, and other amounts, held at
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 807
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Requirements for qualification** A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section—
(1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan;
(2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination));
(3) if the plan of which such trust is a part satisfies the requireme
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 401
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Recognition of loss in case of straddles, etc.**
(1) **Limitation on recognition of loss**
(A) *In general* — Any loss with respect to 1 or more positions shall be taken into account for any taxable year only to the extent that the amount of such loss exceeds the unrecognized gain (if any) with respect to 1 or more positions which were offsetting positions with respect to 1 or more positions from which the loss arose.
(B) *Carryover of loss* — Any loss which may not be taken into account under subparagraph (A) for any taxable year shall, subject to the limitations under subparagraph (A), be treated as sustained in the succeeding taxable year.
(2) **Special rule for identified straddles**
(A) *In general* — In the case of any straddle which is an identified straddle—
(i) paragraph (1) shall not apply with respect to positions comprising the identified straddle,
(ii) if there is any loss with respect to any position of the identified straddle, the basis of each of the offsetting positions in the identified straddle shall be increased by an amount which bears the same ratio to the loss as the unrecognized gain with respect to such offsetting position bears to the aggregate unrecognized gain with respect to all such offsetting positions,
(iii) if the application of clause (ii) does not result in an increase in the basis of any offsetting position in the identified straddle, the basis of each of the offsetting positions in the identified straddle shall be increased in a manner which—
(I) is reasonable, consistent with the purposes of this paragraph, and consistently applied by the taxpayer, and
(II) results in an aggregate increase in the basis of such offsetting positions which is equal to the loss described in clause (ii), and
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1092
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this subtitle, the term “regulated investment company” means any domestic corporation—
(1) which, at all times during the taxable year—
(A) is registered under the Investment Company Act of 1940, as amended ([15 U.S.C. 80a–1](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section80a–1&num=0&edition=prelim) to 80b–2) as a management company or unit investment trust, or
(B) has in effect an election under such Act to be treated as a business development company, or
(2) which is a common trust fund or similar fund excluded by section 3(c)(3) of such Act ([15 U.S.C. 80a–3(c)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section80a–3/c&num=0&edition=prelim)) from the definition of “investment company” and is not included in the definition of “common trust fund” by section 584(a).
**(b) Limitations** A corporation shall not be considered a regulated investment company for any taxable year unless—
(1) it files with its return for the taxable year an election to be a regulated investment company or has made such election for a previous taxable year;
(2) at least 90 percent of its gross income is derived from—
(A) dividends, interest, payments with respect to securities loans (as defined in section 512(a)(5)), and gains from the sale or other disposition of stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies, and
(B) net income derived from an interest in a qualified publicly traded partnership (as defined in subsection (h))
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Federal law — U.S. Code and appendices · legal_authorities
Page 1915
TITLE 26—INTERNAL REVENUE CODE
§ 817
99–514 require an amendment to any plan, such plan
amendment shall not be required to be made before the
first plan year beginning on or after Jan. 1, 1989, see
section 1140 of Pub. L. 99–514, as amended, set out as a
note under section 401 of this title.
SPECIAL
ELECTION
TO
TREAT
INDIVIDUAL
NONCANCELLABLE ACCIDENT
AND HEALTH CONTRACTS
AS CANCELLABLE
Pub. L. 98–369, div. A, title II, § 217(i), July 18, 1984, 98
Stat. 764, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986,
100 Stat. 2095; Pub. L. 100–647, title I, § 1010(h)(1), Nov.
10, 1988, 102 Stat. 3455, provided that:
‘‘(1) IN GENERAL.—A mutual life insurance company
may elect to treat all individual noncancellable (or
guaranteed renewable) accident and health insurance
contracts as though they were cancellable for purposes
of section 816 of subchapter L of chapter 1 of the Inter-
nal Revenue Code of 1986 [formerly I.R.C. 1954].
‘‘(2) EFFECT OF ELECTION ON SUBSIDIARIES OF ELECTING
PARENT.—For purposes of determining the amount of
the small life insurance company deduction of any con-
trolled group which includes a mutual company which
made an election under paragraph (1), the taxable in-
come of such electing company shall be taken into ac-
count under [former] section 806(b)(2) of the Internal
Revenue Code of 1986 (relating to phaseout of small life
insurance company deduction).
‘‘(3) ELECTION.—An election under paragraph (1) shall
apply to the company’s first taxable year beginning
after December 31, 1983, and all taxable years there-
after.
‘‘(4) TIME AND MANNER.—An election under paragraph
(1) shall be made—
‘‘(A) on the return of the taxpayer for its first tax-
able year beginning after December 31, 1983, and
‘‘(B) in such manner as the S
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 817
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