78 S T A T. ]
PUBLIC LAW 8 6 - 6 9 - J U N E 25, 1959
133
" (D) the difference between the fair market vahie and adjusted basis referred to in paragraph (1) shall be reduced (not less than zero) by the excess of (i) the gain that would have been recognized but for this subsection on all prior sales or dispositions after Dacember HI, lOr.S, of properties referred to in subparagraph (C), over (ii) the gain that was recognized on such sales or other dispositions, and " (E) the basis of such property shall be determined as if the gain which would have been recognized but for this subsection were recognized gain. "(3) PROPERTY DEFINED.—For purposes of paragraphs (1) and (2), the term 'property' does not include insurance and annuity contracts (and contracts supplementary thereto) and property described in paragraph (1) of section 1221. ^^ ^^^ '^221. "(c) LIMITATION ON CAPITAL Loss (^\RRYOVERS.—A net capital loss for any taxable year beginning before January 1, 1959, shall not bo taken into account. " (d) G A I N ON TRANSACTIONS OCCURRINO PRIOR TO JANUARY 1,
1959.—For purposes of this part, there shall be excluded any gain from the sale or exchange of a capital asset, and any gain considered as gain from the sale or exchange of a capital asset, resulting from sales or other dispositions of property prior to January 1, 1959. Any gain after December 31, 1958, resulting from the sale or other disposition of property prior to January 1, 1959, which, but for this sentence, would be taken into account under section 1231, shall not bs taken into account under section 1231 for purposes of this part.
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" (e) CERTAIN REINSURANCE TRANSACTIONS I N 1958.—For purposes
of this part, the reinsurance in a single transaction, or in a series of related transactions, occurring in 1958, by a life insurance company of all of its insurance contracts of a particular type, through the assumption by another company or companies of all liabilities under such contracts, shall be treated as a sale of a capital asset. "SEC. 818. ACCOUNTING PROVISIONS. " (a) MEIHOD OF ACCOUNTING.—All computations entering into the determination of the taxes imposed by this part shall be made— " (1) under an accrual method of accounting, or "(2) to the extent permitted under regulations prescribed by the Secretary or his delegate, under a combination of an accrual method of accounting with any other method permitted by this chapter (other than the cash receipts and disbursements method). Except as provided in the preceding sentence, all such computations J)hall ba made in a manner consistent with the manner required for purposes of the annual statement approved by the National Association of Lisurance Commissioners. " (b) AMORTIZATION OF PREMIUM AND ACCRUAL OF DISCOUNT.—
"(1) IN GENERAL.—The appropriate items of income, deductions, and adjustments under this part shall be adjusted to reflect the appropriate amortization of premium and the appropriate accrual of discount attributable to the taxable year on bonds, notes, debentures, or other evidences of indebtedness held by a life insurance company. Such amortization and accrual shall be determined— " (A) in accordance with the method regularly employed by such company, if such method is reasonable, and " (B) in all other cases, in accordance with regulations prescribed by the Secretary or his delegate. "(2)
S P E C I A L RULES.— " (A) AMORTIZATION OF BOND PREMIUM.—In
the case of any bond (as defined in section 171(d)) acquired after Decern-
26 USC i n.
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