26 U.S.C. § 953
Insurance income
Such term shall not include any exempt insurance income (as defined in subsection (e)).
For purposes of this subsection, the term “related person insurance income” means any insurance income (within the meaning of subsection (a)) attributable to a policy of insurance or reinsurance with respect to which the person (directly or indirectly) insured is a United States shareholder in the foreign corporation or a related person to such a shareholder.
Paragraph (1) shall not apply to any foreign corporation for a taxable year of such corporation if the related person insurance income (determined on a gross basis) of such corporation for such taxable year is less than 20 percent of its insurance income (as so determined) for such taxable year determined without regard to those provisions of subsection (a)(1) which limit insurance income to income from countries other than the country in which the corporation was created or organized.
Except as provided in subclause (II), any election under subparagraph (C) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.
If a foreign corporation which made an election under subparagraph (C) for any taxable year is a disqualified corporation for any subsequent taxable year, such election shall not apply to any taxable year beginning after such subsequent taxable year.
The tax imposed by section 4371 shall not apply with respect to any related person insurance income treated as effectively connected with the conduct of a trade or business within the United States under subparagraph (C).
For purposes of this paragraph the term “disqualified corporation” means, with respect to any taxable year, any foreign corporation which is a controlled foreign corporation for an uninterrupted period of 30 days or more during such taxable year (determined without regard to this subsection) but only if a United States shareholder (determined without regard to this subsection) owns (within the meaning of section 958(a)) stock in such corporation at some time during such taxable year.
The Secretary shall prescribe regulations providing for such modifications to the provisions of this subpart as may be necessary or appropriate by reason of subparagraph (A).
Except as provided in subparagraph (B), the term “related person” has the meaning given such term by section 954(d)(3).
In the case of any policy of insurance covering liability arising from services performed as a director, officer, or employee of a corporation or as a partner or employee of a partnership, the person performing such services and the entity for which such services are performed shall be treated as related persons.
Except as provided in subparagraph (B), an election under paragraph (1) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.
If a corporation which made an election under paragraph (1) for any taxable year fails to meet the requirements of subparagraphs (A), (B), and (C), of paragraph (1) for any subsequent taxable year, such election shall not apply to any taxable year beginning after such subsequent taxable year.
If any corporation treated as a domestic corporation under this subsection is treated as a member of an affiliated group for purposes of chapter 6 (relating to consolidated returns), any loss of such corporation shall be treated as a dual consolidated loss for purposes of section 1503(d) without regard to paragraph (2)(B) thereof.
For purposes of section 367, any foreign corporation making an election under paragraph (1) shall be treated as transferring (as of the 1st day of the 1st taxable year to which such election applies) all of its assets to a domestic corporation in connection with an exchange to which section 354 applies.
Earnings and profits of the foreign corporation accumulated in taxable years beginning before
For purposes of this title, any distribution made by a corporation to which an election under paragraph (1) applies out of earnings and profits accumulated in taxable years beginning before
The provisions specified in clause (iv) shall be applied without regard to paragraph (1), except that, in the case of a corporation to which an election under paragraph (1) applies, only earnings and profits accumulated in taxable years beginning before
If a corporation makes an election under paragraph (1), the amount of tax imposed by this chapter for the 1st taxable year to which such election applies shall be increased by the amount determined under subparagraph (B).
Such term shall not include income attributable to the issuing (or reinsuring) of an exempt contract as the result of any arrangement whereby another corporation receives a substantially equal amount of premiums or other consideration in respect of issuing (or reinsuring) a contract which is not an exempt contract.
The term “exempt contract” means an insurance or annuity contract issued or reinsured by a qualifying insurance company or qualifying insurance company branch in connection with property in, liability arising out of activity in, or the lives or health of residents of, a country other than the United States.
The term “applicable home country risks” means risks in connection with property in, liability arising out of activity in, or the lives or health of residents of, the home country of the qualifying insurance company or qualifying insurance company branch, as the case may be, issuing or reinsuring the contract covering the risks.
The term “home country” means, with respect to a controlled foreign corporation, the country in which such corporation is created or organized.
The term “home country” means, with respect to a qualified business unit (as defined in section 989(a)), the country in which the principal office of such unit is located and in which such unit is licensed, authorized, or regulated by the applicable insurance regulatory body to sell insurance, reinsurance, or annuity contracts to persons other than related persons (as defined in section 954(d)(3)) in such country.
In determining insurance income for purposes of subsection (c), exempt insurance income shall not include income derived from exempt contracts which cover risks other than applicable home country risks.
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection and section 954(i).
For income exempt from foreign personal holding company income, see section 954(i).
2017—Subsec. (b)(1)(A). Pub. L. 115–97, § 13512(b)(8), redesignated subpar. (B) as (A) and struck out former subpar. (A) which read as follows: “The small life insurance company deduction.”
Subsec. (b)(1)(B). Pub. L. 115–97, § 13512(b)(8), redesignated subpar. (C) as (B). Former subpar. (B) redesignated (A).
Pub. L. 115–97, § 13511(b)(7), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Section 805(a)(5) (relating to operations loss deduction).”
Subsec. (b)(1)(C). Pub. L. 115–97, § 13512(b)(8), redesignated subpar. (C) as (B).
Subsec. (c)(1)(C). Pub. L. 115–97, § 14212(b)(1)(D), substituted “section 951(a)(1)(A)” for “section 951(a)(1)(A)(i)”.
Subsec. (d)(4)(B)(iv)(II). Pub. L. 115–97, § 14212(b)(3), struck out before period at end “or amounts referred to in clause (ii) or (iii) of section 951(a)(1)(A)”.
2015—Subsec. (e)(10), (11). Pub. L. 114–113 redesignated par. (11) as (10) and struck out former par. (10). Prior to amendment, text of par. (10) read as follows: “This subsection and section 954(i) shall apply only to taxable years of a foreign corporation beginning after
2014—Subsec. (e)(10). Pub. L. 113–295 substituted “
2013—Subsec. (e)(10). Pub. L. 112–240 substituted “
2010—Subsec. (e)(10). Pub. L. 111–312 substituted “
2008—Subsec. (e)(10). Pub. L. 110–343 substituted “
2006—Subsec. (e)(10). Pub. L. 109–222 substituted “
2002—Subsec. (e)(10). Pub. L. 107–147 substituted “
1999—Subsec. (e)(10). Pub. L. 106–170 substituted “taxable years” for “the first taxable year”, “
1998—Subsec. (a). Pub. L. 105–277, § 1005(b)(1)(A), amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “For purposes of section 952(a)(1), the term ‘insurance income’ means any income which—
“(1) is attributable to the issuing (or reinsuring) of any insurance or annuity contract—
“(A) in connection with property in, liability arising out of activity in, or in connection with the lives or health of residents of, a country other than the country under the laws of which the controlled foreign corporation is created or organized, or
“(B) in connection with risks not described in subparagraph (A) as the result of any arrangement whereby another corporation receives a substantially equal amount of premiums or other consideration in respect of issuing (or reinsuring) a contract described in subparagraph (A), and
“(2) would (subject to the modifications provided by paragraphs (1) and (2) of subsection (b)) be taxed under subchapter L of this chapter if such income were the income of a domestic insurance company.”
Subsec. (b)(3), (4). Pub. L. 105–277, § 1005(b)(3), added par. (3) and redesignated former par. (3) as (4).
Subsec. (e). Pub. L. 105–277, § 1005(b)(1)(B), added subsec. (e).
1989—Subsec. (d)(3). Pub. L. 101–239 substituted “for purposes of section 1503(d) without regard to paragraph (2)(B) thereof” for “(as defined in section 1503(d))”.
1988—Subsec. (b)(1). Pub. L. 100–647, § 1012(i)(7)(A), redesignated par. (2) as (1) and struck out former par. (1) which read as follows: “A corporation which would, if it were a domestic insurance corporation, be taxable under part II of subchapter L shall apply subsection (a) as if it were taxable under part III of subchapter L.”
Subsec. (b)(1)(A). Pub. L. 100–647, § 1012(i)(7)(B), added subpar. (A) and struck out former subpar. (A) which read as follows: “The special life insurance company deduction and the small life insurance company deduction.”
Subsec. (b)(2) to (4). Pub. L. 100–647, § 1012(i)(7)(A), (C), redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out “(other than those taken into account under paragraph (3))” after “and deductions” in par. (3). Former par. (2) redesignated (1).
Subsec. (c)(1)(C). Pub. L. 100–647, § 1012(i)(2)(A), added subpar. (C).
Subsec. (c)(2). Pub. L. 100–647, § 1012(i)(3)(A), (4)(B), (5), substituted “insurance income (within the meaning of subsection (a)) attributable” for “insurance income attributable”, “with respect to which the person (directly or indirectly) insured is” for “with respect to which the primary insured is”, and “related person” for “related person (within the meaning of section 954(d)(3))”.
Subsec. (c)(3)(A). Pub. L. 100–647, § 1012(i)(3)(B), (4)(B), substituted “persons who are (directly or indirectly) insured” for “persons who are the primary insured” and “to any such person” for “(within the meaning of section 954(d)(3)) to any such primary insured”.
Subsec. (c)(3)(B). Pub. L. 100–647, § 1012(i)(8), substituted “related person insurance income (determined on a gross basis)” for “related person insurance income” and “its insurance income (as so determined)” for “its insurance income”.
Subsec. (c)(3)(C). Pub. L. 100–647, § 1012(i)(1)(A), (9), substituted “all benefits (other than with respect to section 884)” for “all benefits” and “granted by the United States under any treaty” for “under any income tax treaty” in cl. (i)(II) and inserted at end “An election under this subparagraph made for any taxable year shall not be effective if the corporation (or any predecessor thereof) was a disqualified corporation for the taxable year for which the election was made or for any prior taxable year beginning after 1986.”
Subsec. (c)(3)(D)(i). Pub. L. 100–647, § 1012(i)(1)(B), substituted “Period during which election in effect” for “Election irrevocable” in heading and amended text generally. Prior to amendment, text read as follows: “Any election under subparagraph (C) shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.”
Subsec. (c)(3)(E). Pub. L. 100–647, § 1012(i)(1)(C), added subpar. (E).
Subsec. (c)(5). Pub. L. 100–647, § 1012(i)(2)(B), added par. (5) and redesignated former par. (5) as (6).
Subsec. (c)(6). Pub. L. 100–647, § 1012(i)(4)(A), added par. (6) and redesignated former par. (6) as (7).
Pub. L. 100–647, § 1012(i)(2)(B), redesignated former par. (5) as (6).
Subsec. (c)(7). Pub. L. 100–647, § 1012(i)(21), added par. (7) and struck out former par. (7) “Regulations”, which read as follows: “The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations preventing the avoidance of this subsection through cross insurance arrangements or otherwise.”
Pub. L. 100–647, § 1012(i)(4)(A), redesignated former par. (6) as (7).
Subsec. (c)(8). Pub. L. 100–647, § 1012(i)(21), added par. (8).
Subsec. (d). Pub. L. 100–647, § 6135(a), added subsec. (d).
1986—Pub. L. 99–514, § 1221(b)(3)(D), substituted “Insurance income” for “Income from insurance of United States risks” in section catchline.
Subsec. (a). Pub. L. 99–514, § 1221(b)(1), amended subsec. (a) generally, substituting provisions defining “insurance income” for former provisions defining “income derived from the insurance of United States risks”.
Subsec. (c). Pub. L. 99–514, § 1221(b)(2), added subsec. (c).
1984—Subsec. (a)(2). Pub. L. 98–369, § 211(b)(13)(D), substituted “and (2)” for “, (2), and (3)”.
Subsec. (b)(1). Pub. L. 98–369, § 211(b)(13)(A), redesignated par. (2) as (1). Former par. (1), which provided that the application of part I of subchapter L of this chapter, life insurance company taxable income was the gain from operations as defined in section 809(b), was struck out.
Subsec. (b)(2). Pub. L. 98–369, § 211(b)(13)(B), in amending par. (2) generally, substituted
“(A) The special life insurance company deduction and the small life insurance company deduction.
“(B) Section 805(a)(5) (relating to operations loss deduction).
“(C) Section 832(c)(5) (relating to certain capital losses).”
for
“(A) Section 809(d)(4) (operations loss deduction).
“(B) Section 809(d)(5) (certain nonparticipating contracts).
“(C) Section 809(d)(6) (group life, accident, and health insurance).”
and struck out
“(D) Section 809(d)(10) (small business deduction).
“(E) Section 817(b) (gain on property held on
“(F) Section 832(c)(5) (certain capital losses).”
Pub. L. 98–369, § 211(b)(13)(A), redesignated par. (3) as (2). Former par. (2) redesignated (1).
Subsec. (b)(3). Pub. L. 98–369, § 211(b)(13)(A), redesignated par. (4) as (3). Former par. (3) redesignated (2).
Subsec. (b)(3)(A). Pub. L. 98–369, § 211(b)(13)(C)(i), substituted “section 803(a)(1)” for “section 809(c)(1)”.
Subsec. (b)(3)(B). Pub. L. 98–369, § 211(b)(13)(C)(ii), substituted “section 803(a)(2)” for “section 809(c)(2)”.
Subsec. (b)(3)(C). Pub. L. 98–369, § 211(b)(13)(C)(iii), substituted “section 805(a)(2)” for “section 809(d)(2)”.
Subsec. (b)(4), (5). Pub. L. 98–369, § 211(b)(13)(A), (E), redesignated par. (5) as (4) and substituted “paragraph (3)” for “paragraph (4)”. Former par. (4) redesignated (3).
1976—Subsec. (b)(5). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
1966—Subsec. (b)(3)(F). Pub. L. 89–809 substituted “832(c)(5)” for “832(b)(5)”.
Amendment by section 13511(b)(7) of Pub. L. 115–97 applicable to losses arising in taxable years beginning after
Amendment by section 13512(b)(8) of Pub. L. 115–97 applicable to taxable years beginning after
Amendment by section 14212(b)(1)(D), (3) of Pub. L. 115–97 applicable to taxable years of foreign corporations beginning after
Pub. L. 114–113, div. Q, title I, § 128(c),
Pub. L. 113–295, div. A, title I, § 134(c),
Pub. L. 112–240, title III, § 322(c),
Pub. L. 111–312, title VII, § 750(c),
Pub. L. 107–147, title VI, § 614(c),
Pub. L. 106–170, title V, § 503(c),
Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title.
Pub. L. 100–647, title I, § 1012(i)(3)(C),
Amendment by section 1012(i)(1), (2), (4), (5), (7)–(9), (21) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Pub. L. 100–647, title VI, § 6135(b),
Amendment by Pub. L. 99–514 applicable to taxable years of foreign corporations beginning after
Amendment by Pub. L. 98–369 applicable to taxable years beginning after
Amendment by Pub. L. 89–809 applicable with respect to taxable years beginning after