74 CODIFICATION OF INTERNAL REVENUE LAWS in this paragraph all expenses incurred which are not allowed as deductions by subsection (c) of this section. (c) DEDUCTIONS ALLowED. - In computing the net income of an insurance company subject to the tax imposed by this section there shall be allowed as deductions: (1) All ordinary and necessary expenses incurred, as provided in section 23 (a); (2) All interest as provided in section 23 (b); (3) Taxes as provided in section 23 (c); (4) Losses incurred as defined in subsection (b) (6) of this section; (5) Subject to the limitation contained in section 117 (d), losses sustained during the taxable year from the sale or other disposition of property; (6) Bad debts in the nature of agency balances and bills receiv- able ascertained to be worthless and charged off within the taxable year; (7) The amount of interest earned during the taxable year which under section 22 (b) (4) is excluded from gross income; (8) A reasonable allowance for the exhaustion, wear and tear of property, as provided in section 23 (1); (9) Charitable, and so forth, contributions, as provided in sec- tion 23 (q); (10) Deductions (other than those specified in this subsection) as provided in section 23, but not in excess of the amount of the gross income included under subsection (b) (1) (C) of this section. (d) DEDUCTIONS OF FOREIGN CORPORATIONS.-In the case of a for- eign corporation the deductions allowed in this section shall be allowed to the extent provided in Supplement I in the case of a foreign corporation engaged in trade or business within the United States or having an office or place of business therein. (e) DOBLE DEDUCTIONS.-Nothing in this section shall be con- strued to permit the same item to be twice deducted. SEC. 205. TAXES OF FOREIGN COUNTRIES AND POSSESSIONS OF UNITED STATES. The amount of income, war-profits, and excess-profits taxes imposed by foreign countries or possessions of the United States shall be allowed as a credit against the tax of a domestic insurance company subject to the tax imposed by section 201, 204, or 207, to the extent provided in the case of a domestic corporation in section 131, and in the case of the tax imposed by section 201 or 204 "net income" as used in section 131 means the net income as defined in this Supplement. SEC. 206. COMPUTATION OF GROSS INCOME. The gross income of insurance companies subject to the tax im- posed by section 201 or 204 shall not be determined in the manner provided in section 119. SEC. 207. MUTUAL INSURANCE COMPANIES OTHER THAN LIFE. (a) IMPOSITION OF TAX.- (1) IN GENERAL.-There shall be levied, collected, and paid for each taxable year upon the special class net income of every mutual insurance company (other than a life insurance company) a tax equal to 161/i per centum thereof. (2) FOREIGN CORPORATIONS.-The tax imposed by paragraph (1) shall apply to foreign corporations as well as domestic corporations; but foreign insurance companies not carrying on an insurance busi- ness within the United States shall be taxable as other foreign corporations. (b) GRoss INCO3ME. -Mutual marine-insurance companies shall include in gross income the gross premiums collected and received by them less amounts paid for reinsurance.
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