(a)
General rule
Taxes computed as provided in section
11 shall be imposed for each
taxable year on the taxable income of every
insurance company other than a life
insurance company.
(b)
Alternative tax for certain small
companies
(1)
In general
In lieu of the tax otherwise applicable
under subsection (a), there is hereby
imposed for each taxable year on the income
of every insurance company to which this
subsection applies a tax computed by
multiplying the taxable investment income of
such company for such taxable year by the
rates provided in section
11
(b).
(2)
Companies to which this subsection
applies
(A)
In general
This subsection shall apply to every
insurance company other than life (including
interinsurers and reciprocal underwriters)
if—
(i)
the net written premiums (or, if greater,
direct written premiums) for the taxable
year do not exceed $1,200,000, and
(ii)
such company elects the application of this
subsection for such taxable year.
The election under clause (ii) shall apply
to the taxable year for which made and for
all subsequent taxable years for which the
requirements of clause (i) are met. Such an
election, once made, may be revoked only
with the consent of the Secretary.
(B)
Controlled group rules
(i)
In general For purposes of subparagraph (A),
in determining whether any company is
described in clause (i) of subparagraph (A),
such company shall be treated as receiving
during the taxable year amounts described in
such clause (i) which are received during
such year by all other companies which are
members of the same controlled group as the
insurance company for which the
determination is being made.
(ii)
Controlled group For purposes of clause (i),
the term “controlled group” means any
controlled group of corporations (as defined
in section
1563
(a)); except that—
(I)
“more than 50 percent” shall be substituted
for “at least 80 percent” each place it
appears in section
1563
(a), and
(II)
subsections (a)(4) and (b)(2)(D) of section
1563 shall not apply.
(3)
Limitation on use of net operating losses
For purposes of this part, except as
provided in section
844, a net operating loss (as
defined in section
172) shall not be carried—
(A)
to or from any taxable year for which the
insurance company is not subject to the tax
imposed by subsection (a), or
(B)
to any taxable year if, between the taxable
year from which such loss is being carried
and such taxable year, there is an
intervening taxable year for which the
insurance company was not subject to the tax
imposed by subsection (a).
(c)
Insurance company defined
For purposes of this section, the term
“insurance company” has the meaning given to
such term by section
816
(a)).[1]
