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TITLE 26-INTERNAL REVENUE CODE EFFECTIVE DATE Section applicable only with respect to taxable years beginning after Dec. 31, 1957, see section 4 of Pub. L. 86-69, set out as an Effective Date note under section 801 of this title. PART II-MUTUAL INSURANCE COMPA- NIES (OTHER THAN LIFE AND CERTAIN MARINE INSURANCE COMPANIES AND OTHER THAN FIRE OR FLOOD INSUR- ANCE COMPANIES WHICH OPERATE ON BASIS OF PERPETUAL POLICIES OR PREMIUM DEPOSITS) See. 821. Tax on mutual insurance companies to which part II applies. 822. Determination of taxable investment income. 823. Determination of statutory underwriting income or loss. 824. Adjustments to provide protection against losses. 825. Unused loss deduction. 826. Election by reciprocal. AMENDMENTS 1962-Pub. L. 87-834, § 8(a), Oct. 16. 1962, 76 Stat. 989, substituted "other than life and certain marine insurance companies and other than fire or flood in- surance companies which operate on basis of perpet- ual policies or premium deposits" for "other than life or marine or fire insurance companies issuing perpet- ual policies" in the heading of Part II, "companies to which part II applies" for "companies (other than life or marine or fire insurance companies issuing perpet- ual policies)" in item 821, "Determination of taxable investment income" for "Determination of mutual in- surance company taxable income" in item 822, and "Determination of statutory underwriting income of loss" for "Other definitions" in item 823, and added items 824 to 826. PART REFERRED TO IN OTHER SECTIONS This part is referred to in sections 953, 1016 of this title. § 821. Tax on mutual insurance companies to which part II applies (a) Imposition of tax A tax is hereby imposed for each taxable year on the mutual insurance company taxable income of every mutual insurance company (other than a life insurance company and other than a fire, flood, or marine insurance company subject to the tax imposed by section 831). Such tax shall consist of- (1) Normal tax A normal tax equal to- (A) in the case of a taxable year ending after December 31, 1977, 22 percent of the mutual insurance company taxable income, or 44 percent of the amount by which such taxable income exceeds $6,000, whichever is lesser, or (B) in the case of a taxable year ending after December .1, 1974, and before Janu- ary 1, 1978- (1) 20 percent of so much of the mutual insurance company taxable income as does not exceed $25,000, p.us (1i) 22 percent of so much of the mutual insurance company taxable income as ex- ceeds $25,000, or 44 percent of the amount by which such taxable income exceeds $6,000, whichever is lesser; plus (2) Surtax A surtax on the mutual insurance company taxable income computed as provided in sec- tion 11(c) as though the mutual insurance company taxable income were the taxable income referred to in section 11(c). (b) Mutual insurance company taxable income de- fined For purposes of this part, the term "mutual insurance company taxable income" means, with respect to any taxable year, the amount by which- (1) the sum of- (A) the taxable investment income (as de- fined in section 822(a)(1)), (B) the statutory underwriting income (as defined in section 823(a)(1)), and (C) the amounts required by section 824(d) to be subtracted from the protection against loss account, exceeds (2) the sum of- (A) the investment loss (as defined in sec- tion 822(a)(2)), (B) the statutory underwriting loss (as de- fined in section 823(a)(2)), and (C) the unused loss deduction provided by section 825(a). (c) Alternative tax for certain small companies (1) Imposition of tax There is hereby imposed for each taxable year on the income of each mutual insurance company to which this subsection applies a tax (which shall be in lieu of the tax imposed by subsection (a)) computed as follows: (A) Normal tax A normal tax equal to- (1) in the case of a taxable year ending after December 31, 1977, 22 percent of the taxable investment income, or 44 percent of the amount by which such taxable income exceeds $3,000, whichever is lesser, or (ii) in the case of a taxable year ending after December 31, 1974, and before Janu- ary 1, 1978, 20 percent of so much of the taxable investment income as does not exceed $25,000, plus 22 percent of so much of the taxable investment income as exceeds $25,000, or 44 percent of the amount by which such taxable income ex- ceeds $3,000, whichever is lesser; plus (B) Surtax A surtax on the taxable investment income computed as provided in section 11(c) as though the taxable investment income were the taxable income referred to in section 11(c). (2) Gross amount received, over $150,000 but less than $250,000 If the gross amount received during the tax- able year from the items described in section 822(b) (other than paragraph (1)(D) thereof) and premiums (including deposits and assess- ments) is over $150,000 but less than $250,000, the tax imposed by paragraph (1) shall be re- duced to an amount which bears the same proportion to the amount of the tax deter- mined under paragraph (1) as the excess over § 821 Page 520