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TITLE 26-INTERNAL REVENUE CODE assets (whether or not the assets have been disposed of). The deduction allowable for items described in paragraphs (1) and (7) of section 809(d) with re- spect to segregated asset accounts shall be re- duced to the extent that the amount of such items is increased for the taxable year by ap- preciation (or increased to the extent that the amount of such items is decreased for the tax- able year by depreciation) not reflected in ad- justments under the preceding sentence. (7) Basis of assets held for qualified pension plan contracts In the case of contracts described in subpar- agraph (A), (B), (C), (D), or (E) of section 805(d)(1), the basis of each asset in a segre- gated asset account shall (in addition to all other adjustments to basis) be- (A) increased by the amount of any appre- ciation in value, and (B) decreased by the amount of any de- preciation in value, to the extent that such appreciation and depreciation are from time to time reflected in the increases and de- creases in reserves or other items in para- graph (6) with respect to such contracts. (8) Additional separate computations Under regulations prescribed by the Secre- tary, such additional separate computations shall be made, with respect to the items sepa- rately accounted for in accordance with para- graph (3), as may be necessary to carry out the purposes of this subsection and this part. (Added Pub. L. 86-69, § 2(a), June 25, 1959, 73 Stat. 112, and amended Pub. L. 87-858, § 3(a), Oct. 23, 1962, 76 Stat. 1134; Pub. L. 91-172, title I, § 121(b)(5)(B), Dec. 30, 1969, 83 Stat. 541; Pub, L. 93-406, title II, § 2002(g)(11), Sept. 2, 1974, 88 Stat. 970; Pub. L. 94-455, title XV, § 1505(a), title XIX, §§ 1901(c)(6), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1738, 1803, 1834.) PRIOR PROVISIONS A prior section 801, acts Aug. 16, 1954, ch. 736, 68A Stat. 255; Mar. 13, 1956, ch. 83, § 2. 70 Stat. 36, con- tained provisions similar to this section prior to the the general revision of this part by Pub. L. 86-69. AMENDMENTS 1976-Subsec. (b)(3)(A). Pub. L. 94-455, § 1901(c)(6), struck out "or Territorial" following "association with State". Subsec. (g)(1)(B). Pub. L. 94-455, § 1505(a), in cl. (if) added provision further defining contract with re- serves based on a segregated asset account as a con- tract which is described in section 805(d)(1)(A), (B), (C), (D), or (E) (other than a life, health or accident, property, casualty, or liability insurance contract) and in cl. (ti) substituted "out" for "as annuities". Subsecs. (g)(3), (6), (8). Pub. L. 94-455. § 1906(b)(13)(A) struck out "or his delegate" following "Secretary". 1974-Subsec. (g)(7). Pub. L. 93-406 inserted refer- ence in the provisions preceding subpar. (A) to subpar- agraph (E) of section 805(d)(1). 1969-Subsec. (b)(2). Pub. L. 91-172 redesignated former subpar. (C) as (B). Former subpar. (B), dealing with policies issued by organizations that substantially met the requirements of section 501(c)(9) of this title, was stricken. 1962-Subsee. (g). Pub. L. 87-858 substituted as the subsec. catchline "contracts with reserves based on segregated asset accounts" for "Variable annuities". Subsec. (g)(1). Pub. L. 87-858 substituted as par. (1) catchline "Definitions" for "In general", designated existing provisions as subpar. (A) and added subpar. (B). Subsec. (g)(2). Pub. L. 87-858 substituted provisions respecting life insurance reserves for provisions relat- ing to adjusted reserves rate and assumed rate. Subsec. (g)(3). Pub. L. 87-858 substituted provisions respecting separate accounting for provisions relating to current earnings rate. Subsec. (g)(4). Pub. L. 87-858 substituted provisions respecting investment yield for provisions relating to increases and decreases in reserves, incorporated in par. (6)(A) and (B). Subsec. (g)(5). Pub. L. 87-858 substituted provisions respecting policy and other contract liability require- ments for provisions relating to companies issuing variable annuities and other contracts. Subsec. (g)(6). Pub. L. 87-858 redesignntod furner par. (4) as (6) and added provision relating to reduc- tion of deduction allowed for certain items with re- spect to segregated asset accounts. Former par. (6) had provided that former pars. (1) to (5) would not apply with respect to any taxable year beginning after Dec. 31, 1962. Subsec. (g)(7). Pub. L. 87-858 added par. (7). Subsec. (g)(8). Pub. L. 87-858 redesignated subpar. (B) of former par. (5) as par. (8), substituting "with re- spect to the items separately accounted for in accor. dance with paragraph (3)" for "with respect to such annuity contracts and such other contracts". EFncTIv DATE OF 1976 AMENDMENT Section 1505(c) of Pub. L. 94-455 provided that: "The amendments made by this section [amending subsec. (g)(1)(B)(ii) of this section and section 401(f) of this title] apply for taxable years beginning after December 31, 1975." Amendment of subsec. (b)(3) by section 1901(c)(6) of Pub. L. 94-455 effective for 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. EFFECTIVE DATE OF 1974 AMENDMENT Amendment by Pub. L. 93-406 effective on Jan. 1, 1975, see section 2002(t)(2) of Pub. L. 93-406, set out as an Effective Date note under section 4973 of this title. EFFECTIVE DATE OF 1969 AMENDMENT Amendment by Pub. L. 91-172 applicable to taxable years beginning after Dec. 31, 1969, see section 121(g) of Pub. L. 91-172, set out as an Effective Date of 1969 Amendment note under section 511 of this title. EFFECTIVE DATE OF 1962 AMENDMENT Section 3(f) of Pub. L. 87-858 provided that: "Except as provided in subsection (d)(2) [set out as a note under section 812 of this title], the amendments made by this section [to sections 801, 802, 804, 809, 815, and 6501 of this title] shall apply with respect to taxable years beginning after December 31, 1961." EFFECTIVE DATE Section 4 of Pub. L. 86-69 provided that: "Except as otherwise provided in this Act, the amendments made by this Act [to this part and sections 381(c), (d), 841, 842, 891, 1016(a), 1201(a), (c), 1232(a), 1504(b), 4371(2) and 6501(c) of this title] shall apply only with respect to taxable years beginning after December 31, 1957." SHORT TITLE Section 1 of Pub. L. 86-69 provided that: "This Act [amending this part and sections 34(c), 116(b), 381(c), (d), 841, 842, 891, 1016(a), 1201(a), (c), 1232(a), 1504(b), 4371(2) and 6501(c) of this title, and enacting notes set out under sections 801, 6072 and 6655 of this title] may be cited as the 'Life Insurance Company Income Tax Act of 1959'." Page 497 § 801