Sec. 3514. Clarification of tax basis of life insurance contracts
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Paragraph
(1)of section 1016(a) is amended by striking subparagraph
(A)and all that follows and inserting the following: for— taxes or other carrying charges described in section 266; or expenditures described in section 173 (relating to circulation expenditures), for which deductions have been taken by the taxpayer in determining taxable income for the taxable year or prior taxable years; or for mortality, expense, or other reasonable charges incurred under an annuity or life insurance contract; . The amendment made by this section shall apply to transactions entered into after August 25, 2009.