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TITLE 26-INTERNAL REVENUE CODE Amounts shall be taken into account on a first-in-time basis. For purposes of section 832(e) of such Code [subsec. (e) of this section] and this paragraph, if part of the reserve is reduced under State law or regula- tion, such reduction shall first apply to the extent of amounts added to the reserve for taxable years begin- ning before 1967, and only then to amounts added thereafter. "(3) The provisions of this subsection shall apply to taxable years beginning after December 31, 1956." CROSS REFERENCES Consolidated returns, see section 1504 of this title. Credit on foreign taxes, see section 841 of this title. Dividends defined in distributions by corporations, see section 316 of this title. Personal holding company income, see section 543 of this title. Tax imposed on corporations, see section 11 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 543, 823, 824, 841, 844, 953, 6511 of this title; title 31 section 757c-3. PART IV-PROVISIONS OF GENERAL APPLICATION Sec. 841. Credit for foreign taxes. 842. Foreign corporations carrying on insurance busi- ness. 843. Annual accounting period. 844. Special loss carryover rules. AMENDMENTS 1969-Pub. L. 91-172, title IX, § 907(c)(2)(A), Dec. 30, 1969, 83 Stat. 717, added item 844. 1966-Pub. L. 89-809, title I, § 104(i)(2), Nov. 13, 1966, 80 Stat. 1561, substituted "Foreign corporations carry- ing on insurance business" for "Computation of gross income" in item 842. 1956-Act Mar. 13, 1956, ch. 83, § 4(b). 70 Stat. 49, added item 843. § 841. Credit for foreign taxes The taxes imposed by foreign countries or possessions of the United States shall be al- lowed as a credit against the tax of a domestic insurance company subject to the tax imposed by section 802, 821, or 831, to the extent pro- vided in the case of a domestic corporation in section 901 (relating to foreign tax credit). For purposes of the preceding sentence (and for purposes of applying section 906 with respect to a foreign corporation subject to tax under this subchapter), the term "taxable income" as used in section 904 means- (1) in the case of the tax imposed by section 802, the life insurance company taxable income (as defined in section 802(b)), (2) in the case of the tax imposed by section 821(a), the mutual insurance company tax- able income (as defined in section 821(b)); and in the case of the tax imposed by section 821(c), the taxable investment income (as de- fined in section 822(a)), and (3) in the case of the tax imposed by section 831, the taxable income (as defined in section 832(a)). (Aug. 16, 1954, ch. 736, 68A Stat. 267: Mar. 13, 1956, ch. 83, § 5(4), 70 Stat. 49; June 25, 1959, Pub. L. 86-69, § 3(b), 73 Stat. 139; Oct. 16, 1962, Pub. L. 87-834, § 8(g)(1), 76 Stat. 998; Nov. 13, 1966, Pub. L. 89-809, title I, § 104()(8), 80 Stat. 1562.) AMENDMENTS 1966-Pub. L. 89-809 substituted "For purposes of the preceding sentence (and for purposes of applying section 906 with respect to a foreign corporation sub- Ject to tax under this subchapter), the term "taxable income" as used in section 904" for "For purposes of the preceding sentence, the term 'taxable income' as used in section 904". 1962-Pub. L. 87-834 added par. (2) and redesignated former par. (2) as (3). 1959-Pub. L. 86-69 eliminated a reference to seccion 811 of this title in the first sentence, and substituted "section 802, the life insurance company taxable income (as defined in section 802(b)), and" for "section 802 or 811, the net investment income (as defined in section 803(c))" in par. (1). 1956-Act Mar. 13, 1956, inserted references to sec- tion 811. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89-809 with respect to tax- able years beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89-809, set out as an Effective Date of 1966 Amendment note under section 11 of this title. EFFECTIVE DATE OF 1962 AMENDMENT Amendmcnt by Pub, L. 87-834 applicable with re- spect to taxable years beginning after Dec. 31, 1962, see section 8(h) of Pub. L. 87-834, set out as an Effec- tive Date of 1962 Amendment note under section 821 of this title. EFFECTIVE DATE OF 1959 AMENDMENT Amendment by Pub. L. 86-69 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. 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 821 of this title. § 842. Foreign corporations carrying on Insurance business If a foreign corporation carrying on an insur- ance business within the United States would qualify under part I, II, or III of this sub- chapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation, such corporation shall be taxable under such part on its income effectively connected with its conduct of any trade or business within the United States. With respect to the remainder of its income, which is from sources within the United States, such a foreign corporation shall be taxable as provided in section 881. (Aug. 16, 1954, ch. 736, 68A Stat. 267; Mar. 13, 1956, ch. 83, § 5(5), 70 Stat. 49; June 25, 1959, Pub. L. 86-69, § 3(f)(1), 73 Stat. 140; Nov. 13, 1966, Pub. L. 89-809, title I, § 104(i)(1), 80 Stat. 1561.) AMENDMENTS 1966-Pub. L. 89-809 substituted provisions covering the taxability of foreign corporations that are carry- ing on an insurance business within the United States which would qualify under part I, II, or III of this sub- chapter for the taxable year if (without regard to income not effectively connected with the conduct of any trade or business within the United States) it were a domestic corporation for provisions that the gross income of insurance companies subject to the tax im- § 841 Page 534