Sec. 3506. Modification of rules for life insurance proration for purposes of determining the dividends received deduction
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/bill/113/hr/1/ih/section-3506·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 812 is amended to read as follows: Sections 805(a)(4) and 807 shall be applied on an account by account basis. For purposes of section 805(a)(4), the term company’s share means, with respect to any account for any taxable year, the ratio (expressed as a percentage) of— the excess of— the mean assets of such account for such taxable year, over the mean reserves with respect to such account for such taxable year, divided by the mean assets of such account for such taxable year.
For purposes of section 807, the term policyholder’s share means, with respect to any account for any taxable year, the excess of 100 percent over the percentage determined under paragraph (2). For purposes of this subsection— The term mean assets means, with respect to any account for any taxable year, 50 percent of the sum of— the fair market value of the assets of such account determined as of the beginning of such taxable year, and the fair market value of the assets of such account determined as of the close of such taxable year.
The term mean reserves means, with respect to any account for any taxable year, 50 percent of the sum of— the reserves with respect to such account as determined under section 807 as of the beginning of such taxable year, and the reserves with respect to such account as determined under section 807 as of the close of such taxable year. Dividends described in section 246(c) shall not be taken into account for purposes of determining mean assets or mean reserves. Fees and expenses shall not be taken into account for purposes of determining mean assets or mean reserves. .
Section 817A(e)(2) is amended by striking , 807(d)(2)(B), and 812 and inserting and 807(d)(2)(B) The table of sections for subpart D of part I of subchapter L of chapter 1 is amended by striking the item relating to section 812 and inserting the following: Sec. 812. Determination of company’s and policyholder’s share on account by account basis. . The amendments made by this section shall apply to taxable years beginning after December 31, 2014.