1710 Dif feren t taxable y ears of pa rtne r and partnership . Bas is of comp utati on . Insurance companies . Tax on life ins urance companies . "Life insurance co m- pany" defined . Imposition of tax. Rate on net income. Ante, p . 1655. Normal-tax net income of foreign com- panie s . No United States business . Gross income, life insurance companies . "Gross income" de- fined . "Reserve funds re- quired by law." Net income, life in- surance companies . Deductions . Tax-free interest . .Ante, p . 1657 . 74TH C ONGRESS . SESS. II. CH. 690. JUNE 22, 1936. amount of the distributive share of each individual . The return shall be sworn to by any one of the partners. SEC. 188 . DIFFERENT TAXABLE YEARS OF PARTNER AND PARTNER- SHIP. If the taxable year of a partner is different from that of the part- nership, the distributive share of the net income of the partnership to be included in computing the net income of the partner for his ta xable yea r shall b e based u pon the n et income of the pa rtnership for any taxable year of the partnership (whether beginning on, before, or after January 1, 1936) ending within the taxable year of the partner . Supplement G-Insurance Companies SEC. 201. TAX ON LIFE INSURANCE COMPANIES. (a) DEFINITION .--When used in this title the term "life insurance company" means an insurance company engaged in the business of issuing life insurance and annuity contracts (including contracts of combined life, health, and accident insurance), the reserve funds of which held for the fulfillment of such contracts comprise more than 50 per centum of its total reserve funds . (b) IMPOSITION OF TAX .- (1) IN GENERAL .-In lieu of the tax imposed by sections 13 and 14, there shall be levied, collected, and paid for each taxable year upon the normal-tax net income of every life insurance company a tax of 15 per centum of the amount thereof . (2) NO RMA L- TAX NET INC OME OF FOREIGN LIFE INSURANCE COM- PANIES.-In the case of a foreign life insurance company, the nor- mal -tax net income sh all be an amount w hich bears the same ratio to the normal-tax net income, computed without regard to this paragraph, as the reserve funds required by law and held by it at the end of the taxable year upon business transacted within the United States bear to the reserve funds held by it at the end of the taxable year upon all business transacted . (3) No UNITED STATES INSURANCE BUSINESS .-Foreign life insur- anc e co mpan ies not carry ing on an insurance business with in the United States and holding no reserve funds upon business transacted within the United States, shall not be taxable under this section but shall be taxable as other foreign corporations . SEC. 202 . GROSS INCOME OF L IF E INSUR ANCE COMPA NIES . (a) In the case of a life ins urance com pany the te rm "gross income" means the gross amount of income received during the taxable year from interest, dividends, and rents . (b) The term "reserve funds required by law" includes, in the case of assessment insurance, sums actually deposited by any com- pany or association with State or Territorial officers pursuant to law as guaranty or reserve funds, and any funds maintained under the charter or articles of incorporation of the company or association exclusively for the payment of claims arising under certificates of membership or policies issued upon the assessment plan and not subject to any other use . SEC . 203. NET INCOME OF L IF E INSURA NCE COMPANIES . (a) GENERAL RU LE .-In the case of a life insurance comp any the term "net income" means the gross income less- (1) TAX-FREE INTEREST .-The amount of interest received during the taxable year whic h under s ection 22 (b) (4) i s exclude d from gross income ;
