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TITLE 26-INTERNAL REVENUE CODE Subsec. (e). Pub. L. 94-455, § 1901(a)(84)(C), redesig- nated former subsec. (f) as (e). Former subsec. (e) was redesignated (d). Subsec. (M. Pub. L. 94-455, § 1901(a)(84)(C), redesig- nated former subsec. (f) as (e). 1969-Subsec. (b)(1)(A). Pub. L. 91-172, §432(a)(1), added provisions for the method of computing the amount of the reasonable addition to the reserve for losses on nonqualifying loans. Subsec. (b)(2). Pub. L. 91-172, § 432(a)(2), substituted a table of applicable percentages of the taxable income for each year up to 1979 and thereafter for the amount in excess of 60 percent over the amount re- ferred to in former subsec. (b)(1)(A), transferred the remaining provisions of former subsec. (b)(2) to sub- part (D), and added subpars. (B) to (E). Subsec. (b)(3). Pub. L. 91-172, § 432(a)(2), substan- tially changed the method of computation of the amount by conforming it to the method of determin- ing the additions to the reserves for losses on loans of banks under section 585(b)(2). Subsec. (b)(4). Pub. L. 91-172, § 432(a)(2), changed the method of computation of the amount by con- forming it to the method of determining the additions to the reserves for losses on loans of banks under sec. tion 585(b)(3). Subsec. (b)(5). Pub. L. 91-172, § 432(a)(2), substituted provisions relating to the determination of reserve for percentage method for provisions relating to the limi- tation in case of certain domestic building and loan as- soclatlons. Subsec. (f). Pub. L. 91-172. § 432(b), excepted the ap- plication of par. (1) to any transaction to which sec- tion 381 of this title applied. 1962-Pub. L. 87-834 amended section generally to read as above set forth. Prior to such amendment, sec- tion read as follows: "§ 593. Additions to reserve for bad debts "In the case of a mutual savings bank not having capital stock represented by shares, a domestic build- ing and loan association, and a cooperative bank with- out capital stock organized and operated for mutual purposes and without profit, the reasonable addition to a reserve for bad debts under section 166(c) shall be determined with due regard to the amount of the tax- payer's surplus or bad debt reserves existing at the close of December 31, 1951. In the case of a taxpayer described in the preceding sentence, the reasonable addition to a reserve for bad debts for any taxable year shall in no case be less than the amount deter- mined by the taxpayer as the reasonable addition for such year; except that the amount determined by the taxpayer under this sentence shall not be greater than the lesser of- "(1) the amount of its taxable income for the tax- able year, computed without regard to this section, or"(2) the amount by which 12 percent of the total deposits or withdrawable accounts of its depositors at the close of such year exceeds the sum of its sur- plus, undivided profits, and reserves at the beginning of the taxable year." EFFEcTivE DATE OF 1976 AMENDMENT Amendment of subsecs. Cb)-f) by section 1901(a)(84) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EmrEcTivE DATE OF 1969 AMENDMENT Section 432(e) of Pub. L. 91-172 provided that: "The amendments made by this section [amending this sec- tion and section 7701(a)(19), (32) of this title] shall be effective for taxable years beginning after July 11, 1969." EfFEctivE DATE OF 1962 AMENDMENT Section 6(g)(1) of Pub. L. 87-834 provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after De- cember 31, 1962, except that section 593(f) of the In- ternal Revenue Code of 1954 [subsec. (f) of this sec- tion] shall apply to distributions after December 31, 1962, in taxable years ending after such date." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 46, 57, 50B, 166. 172, 582, 585, 595, 596, 992, 1038 of this title. § 594. Alternative tax for mutual savings banks con- ducting life Insurance business (a) Alternative tax In the case of a mutual savings bank not having capital stock represented by shares, au- thorized under State law to engage in the busi- ness of issuing life insurance contracts, and which conducts a life insurance business in a separate department the accounts of which are mairntained separately from the other accounts of the mutual savings bank, there shall be im- posed in lieu of the taxes imposed by section 11 or section 1201(a), a tax consisting of the sum of the partial taxes determined under para- graphs (1) and (2): (1) A partial tax computed on the taxable income determined without regard to any items of gross income or deductions properly allocable to the business of the life insurance department, at the rates and in the manner as if this section had not been enacted; and (2) a partial tax computed on the Income of the life insurance department determined without regard to any items of gross income or deductions not properly allocable to such department, at the rates and in the manner provided in subchapter L (sec. 801 and !ollow- ing) with respect to life insurance companies. (b) Limitations of section Subsection (a) shall apply only if the life in- surance department would, if it were treated as a separate corporation, qualify as a life insur- ance company under section 801. (Aug. 16, 1954, ch. 736, 68A Stat. 205; Mar. 13, 1956, ch. 83, § 5(3), 70 Stat. 49.) AMENDMENTS 1956-Subsec. (a)(2). Act Mar. 13, 1956, substituted "the income" for "the taxable income (as defined in section 803)". EFFECTIVE DATE OF 1956 AMENDMENT Amendment by act Mar. 13, 1956, applicable only to taxable years beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set out as an Effective Date of 1956 Amendment note under section 316 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 11, 811 of this title. § 595. Foreclosure on property securing loans (a) Nonrecognition of gain or loss as a result of fore- closure In the case of a creditor which is an organiza- tion described in section 593(a), no gain or loss shall be recognized, and no debt shall be consid- ered as becoming worthless or partially worth- less, as the result of such organization having bid in at foreclosure, or having otherwise re- duced to ownership or possession by agreement § 594 Page 438