Allocation of amounts to income and investment

For purposes of paragraph (2)(B)—

(A) Allocation to income

(A)Allocation to income#

Any amount to which this subsection applies shall be treated as allocable to income on the contract to the extent that such amount does not exceed the excess (if any) of—

(i) the cash value of the contract (determined without regard to any surrender charge) immediately before the amount is received, over

(ii) the investment in the contract at such time.

(A)(i)#

the cash value of the contract (determined without regard to any surrender charge) immediately before the amount is received, over

(A)(ii)#

the investment in the contract at such time.

(B)Allocation to investment#

Any amount to which this subsection applies shall be treated as allocable to investment in the contract to the extent that such amount is not allocated to income under subparagraph (A).

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Allocation of amounts to income and investment

Official source

For purposes of paragraph (2)(B)—

(A) Allocation to income

(A)Allocation to income#

Any amount to which this subsection applies shall be treated as allocable to income on the contract to the extent that such amount does not exceed the excess (if any) of—

(i) the cash value of the contract (determined without regard to any surrender charge) immediately before the amount is received, over

(ii) the investment in the contract at such time.

(A)(i)#

the cash value of the contract (determined without regard to any surrender charge) immediately before the amount is received, over

(A)(ii)#

the investment in the contract at such time.

(B)Allocation to investment#

Any amount to which this subsection applies shall be treated as allocable to investment in the contract to the extent that such amount is not allocated to income under subparagraph (A).