26 U.S.C. § 831: Tax on insurance companies other than life insurance companies

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. 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). the net written premiums (or, if greater, direct written premiums) for the taxable year do not exceed $2,200,000, such company meets the diversification requirements of subparagraph (B), and such company elects the application of this subsection for such taxable year. no more than 20 percent of the net written premiums (or, if greater, direct written premiums) of such company for the taxable year is attributable to any one policyholder, or such insurance company does not meet the requirement of subclause (I) and no person who holds (directly or indirectly) an interest in such insurance company is a specified holder who holds (directly or indirectly) aggregate interests in such insurance company which constitute a percentage of the entire interests in such insurance company which is more than a de minimis percentage higher than the percentage of interests in the relevant specified assets with respect to such insurance company held (directly or indirectly) by such specified holder. For purposes of clause (i)(II), any interest in the insurance company referred to in such clause which is held (directly or indirectly) by an individual who is a spouse of the specified holder, and who is a citizen of the United States, shall be treated as held by the specified holder. is a lineal descendent (including by adoption) of an individual who holds an interest (directly or indirectly) in the specified assets with respect to such insurance company or of such individual’s spouse, is a spouse of any lineal descendent described in subclause (I), or is not a citizen of the United States and is a spouse of an individual who holds an interest (directly or indirectly) in the specified assets with respect to such insurance company. The term “relevant specified assets” means, with respect to any specified holder with respect to any insurance company, the aggregate amount of the specified assets, with respect to such insurance company, any interest in which is held (directly or indirectly) by any spouse or specified relation of such specified holder. Such term shall not include any specified asset solely by reason of an interest in such asset which was acquired by such spouse or specified relation by bequest, devise, or inheritance from a decedent during the taxable year of the insurance company or the preceding taxable year. For purposes of this subclause, the term “specified relation” means any individual with respect to whom the specified holder bears a relationship described in subclause (I) or (II) of clause (iii). The term “specified assets” means, with respect to any insurance company, the trades or businesses, rights, or assets with respect to which the net written premiums (or direct written premiums) of such insurance company are paid. An indirect interest includes any interest held through a trust, estate, partnership, or corporation. Except as otherwise provided by the Secretary in regulations or other guidance, 2 percentage points or less shall be treated as de minimis. 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, and in determining the attribution of premiums to any policyholder under subparagraph (B)(i), all policyholders which are related (within the meaning of section 267(b) or 707(b)) or are members of the same controlled group shall be treated as one policyholder. “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears in section 1563(a), and subsections (a)(4) and (b)(2)(D) of section 1563 shall not apply. In the case of reinsurance or any fronting, intermediary, or similar arrangement, the term “policyholder” means each policyholder of the underlying direct written insurance with respect to such reinsurance or arrangement. such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof. to or from any taxable year for which the insurance company is not subject to the tax imposed by subsection (a), or 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). For purposes of this section, the term “insurance company” has the meaning given to such term by section 816(a). Every insurance company for which an election is in effect under subsection (b) for any taxable year shall furnish to the Secretary at such time and in such manner as the Secretary shall prescribe such information for such taxable year as the Secretary shall require with respect to the requirements of subsection (b)(2)(A)(ii). For taxation of foreign corporations carrying on an insurance business within the United States, see section 842. For exemption from tax for certain insurance companies other than life, see section 501(c)(15). In the case of any insurance company which had a protection against loss account for its last taxable year beginning before January 1, 1987 , there shall be included in the gross income of such company for any taxable year beginning after December 31, 1986 , the amount which would have been included in gross income for such taxable year under section 824 of the Internal Revenue Code of 1954 [now 1986] (as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]). For purposes of the preceding sentence, no addition to such account shall be made for any taxable year beginning after December 31, 1986 . In the case of a company taxable under section 831(b) of the Internal Revenue Code of 1986 (as amended by subsection (a)), any amount included in gross income under this paragraph shall be treated as gross investment income. is from a taxable year beginning before January 1, 1987 , and could have been carried under such section to a taxable year beginning after December 31, 1986 , but for the repeal made by subsection (a)(1) [repealing sections 821 and 823 to 825 of this title],