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USC Title 26 enacted through 2008

§ 808. Policyholder dividends deduction

 
(a)
Policyholder dividend defined
 
For purposes of this part, the term "policyholder dividend" means any dividend or similar distribution to policyholders in their capacity as such.
 
(b)
Certain amounts included
 
For purposes of this part, the term "policyholder dividend" includes -
 
(1)
any amount paid or credited (including as an increase in benefits) where the amount is not fixed in the contract but depends on the experience of the company or the discretion of the management,
 
(2)
excess interest,
 
(3)
premium adjustments, and
 
(4)
experience-rated refunds.
 
(c)
Amount of deduction
 
The deduction for policyholder dividends for any taxable year shall be an amount equal to the policyholder dividends paid or accrued during the taxable year.
 
(d)
Definitions
 
For purposes of this section -
 
(1)
Excess interest
 
The term "excess interest" means any amount in the nature of interest -
 
(A)
paid or credited to a policyholder in his capacity as such, and
 
(B)
in excess of interest determined at the prevailing State assumed rate for such contract.
 
(2)
Premium adjustment
 
The term "premium adjustment" means any reduction in the premium under an insurance or annuity contract which (but for the reduction) would have been required to be paid under the contract.
 
(3)
Experience-rated refund
 
The term "experience-rated refund" means any refund or credit based on the experience of the contract or group involved.
 
(e)
Treatment of policyholder dividends
 
For purposes of this part, any policyholder dividend which -
 
(1)
increases the cash surrender value of the contract or other benefits payable under the contract, or
 
(2)
reduces the premium otherwise required to be paid,
 
shall be treated as paid to the policyholder and returned by the policyholder to the company as a premium.
 
(f)
Coordination of 1984 fresh-start adjustment with acceleration of policyholder dividends deduction through change in business practice
 
(1)
In general
 
The amount determined under paragraph (1) of subsection (c) for the year of change shall (before any reduction under paragraph (2) of subsection (c)) be reduced by so much of the accelerated policyholder dividends deduction for such year as does not exceed the 1984 fresh-start adjustment for policyholder dividends (to the extent such adjustment was not previously taken into account under this subsection).
 
(2)
Year of change
 
For purposes of this subsection, the term "year of change" means the taxable year in which the change in business practices which results in the accelerated policyholder dividends deduction takes effect.
 
(3)
Accelerated policyholder dividends deduction defined
 
For purposes of this subsection, the term "accelerated policyholder dividends deduction" means the amount which (but for this subsection) would be determined for the taxable year under paragraph (1) of subsection (c) but which would have been determined (under such paragraph) for a later taxable year under the business practices of the taxpayer as in effect at the close of the preceding taxable year.
 
(4)
1984 fresh-start adjustment for policyholder dividends
 
For purposes of this subsection, the term "1984 fresh-start adjustment for policyholder dividends" means the amounts held as of December 31, 1983, by the taxpayer as reserves for dividends to policyholders under section 811(b) (as in effect on the day before the date of the enactment of the Tax Reform Act of 1984) other than for dividends which accrued before January 1, 1984. Such amounts shall be properly reduced to reflect the amount of previously nondeductible policyholder dividends (as determined under section 809(f) as in effect on the day before the date of the enactment of the Tax Reform Act of 1984).
 
(5)
Separate application with respect to lines of business
 
This subsection shall be applied separately with respect to each line of business of the taxpayer.
 
(6)
Subsection not to apply to mere change in dividend amount
 
This subsection shall not apply to a mere change in the amount of policyholder dividends.
 
(7)
Subsection not to apply to policies issued after December 31, 1983
 
(A)
In general
 
This subsection shall not apply to any policyholder dividend paid or accrued with respect to a policy issued after December 31, 1983.
 
(B)
Exchanges of substantially similar policies
 
For purposes of subparagraph (A), any policy issued after December 31, 1983, in exchange for a substantially similar policy issued on or before such date shall be treated as issued before January 1, 1984. A similar rule shall apply in the case of a series of exchanges.
 
(8)
Subsection to apply to policies provided under employee benefit plans
 
This subsection shall not apply to any policyholder dividend paid or accrued with respect to a group policy issued in connection with a plan to provide welfare benefits to employees (within the meaning of section 419(e)(2)).








Tax Code (Internal Revenue Code) Section Index


U.S. GAAP by Codification Topic
 
105 GAAP Hierarchy
105 GAAP History

205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory

340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments

505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock

605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements

805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview

820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option

830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest

840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions

855 Subsequent Events
860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156

985-20 Costs of software to be sold


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Tax Code (Internal Revenue Code) Section Index




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