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TITLE 26-INTERNAL REVENUE CODE § 812. Operations loss deduction (a) Deduction allowed There shall be allowed as a deduction for the taxable year an amount equal to the aggregate of- (1) the operations loss carryovers to such year, plus (2) the operations loss carrybacks to such year. For purposes of this part, the term "operations loss deduction" means the deduction allowed by this subsection. (b) Operations loss carrybacks and carryovers (1) Years to which loss may be carried The loss from operations for any taxable year (hereinafter in this section referred to as the "loss year") shall be- (A) an operations loss carryback to each of the 3 taxable years preceding the loss year, (B) an operations loss carryover to each of the 5 taxable years following the loss year, and (C) subject to subsection (e), if the life in- surance company is a new company for the loss year, an operations loss carryover to each of the 3 taxable years following the 5 taxable years described in subparagraph (B). In the case of an operations loss for any tax- able year ending after December 31, 1975, this paragraph shall be applied by substituting "'7 taxable years" for "5 taxable years". (2) Amount of carrybacks and carryovers The entire amount of the loss from oper- ations for any loss year shall be carried to the earliest of the taxable years to which (by reason of paragraph (1)) such loss may be car- ried. The portion of such loss which shall be carried to each of the other taxable years shall be the excess (if any) of the amount of such loss over the sum of the offsets (as de- fined In subsection (d)) for each of the prior taxable years to which such loss may be car- ried. (3) Election for operations loss carrybacks In the case of a loss from operations for any taxable year ending after December 31, 1975, the taxpayer may elect to relinquish the entire carryback period for such loss. Such election shall be made by the due date (in- cluding eitensions of time) for filing the return for the taxable year of the loss from operations for which the election is to be in effect, and once made for any taxable year, such election shall be irrevocable for that tax- able year. (c) Computation of loss from operations In computing the loss from operations for purposes of this section- (1) The operations loss deduction shall not be allowed. (2) The deductions allowed by sections 243 (relating to dividends received by corpora- tions), 244 (relating to dividends received on certain preferred stock of public utilities), and 245 (relating to dividends received from certain foreign corporations) shall be comput- ed without regard to section 246(b) as modi- fied by section 809(d)(8)(B), (d) Offset defined (1) In general For purposes of subsection (b)(2), the term "offset" means, with respect to any taxable year, an amount equal to that increase in the operations loss deduction for the taxable year which reduces the life insurance company taxable income (computed without regard to section 802(b)(3)) for such year to zero. (2) Operations loss deduction For purposes of paragrapl, (1), the oper- ations loss deduction for any taxable year shall be computed without regard to the loss from operations for the loss year or for any taxable year thereafter. (e) New company defined For purposes of this part, a life insurance company Is a new company for any taxable year only if such taxable year begins not more than 5 years after the first day on which it (or any predecessor, if section 381(c)(22) applies or would have applied if in effect) was authorized to do business as an insurance company. (f) Application of subtitle A and subtitle F Except as provided in section 809(e), subtitle A and subtitle F shall apply in respect of oper- ations loss carrybacks, operations loss car- ryovers, and the operations loss deduction under this part in the same manner and to the same extent as such subtitles apply in respect of net operating loss carrybacks, net operating loss carryovers, and the net operating loss de- duction. (Added Pub. L. 86-69, § 2(a), June 25, 1959, 73 Stat. 127, and amended Pub. L. 87-858, § 3(d)(1), Oct. 23, 1962, 76 Stat. 1137; Pub. L. 88-571, § 1(a), Sept. 2, 1964, 78 Stat. 857; Pub. L. 94-455, title VIII, § 806(d)(1), title XIX, § 1901(a)(99), Oct. 4, 1976, 90 Stat. 1598, 1781.) PRIc.t PROVISIONS A prior section 812, act Aug. 16, 1954, ch. 736, § 812, as added Mar. 13, 1956, ch. 83, § 2, 70 Stat. 45, related to reserve and other policy liability deduction, prior to the general revision of this part by Pub. L. 86-69, § 2(a). A prior section 813, act Aug. 16, 1954. ch. 736, § 813, as added Mar. 13, 1956, ch. 83, § 2, 70 Stat. 46, which related to adjustment for certain reserves, was omitted from this part by Pub. L. 86-69, § 2(a), June 25, 1959, 73 Stat. 112, which amended this part in its entirety. . AMENDMENTS 1976-Subsec. (b)(1). Pub. L. 94-455, §§806(d)(1)(A), 1901(a)(99), among other changes, struck out refer- ence to beginning after Dec. 31, 1954, substituted ref- erence to subparagraph (B) for reference to clause (ii), and added provision that in the case of an operations loss for any taxable year ending after Dec. 31, 1975, this paragraph shall be applied by substituting "7 tax- able years" for '5 taxable years". Subsec. (b)(3). Pub, L. 94-455, §806(d)(1)(B), added subsec. (b)(3). 1964-Subsec. (e). Pub. L. 88-571 eliminated provi- sions which imposed limitations on the eight year car- ryover by the exclusion of nonqualifled corporations. 1962-Subsec. (e)(2)(B). Pub. L. 87-858 Inserted In the first sentence "(except a corporation taxable under part II or part III of this subchapter)" following "with any other corporation". Page 508 § 812