73 ST AT.]
PUBLIC LAW 86-69-JUNE 25, 1959
" (B) the entering- into'of any lease, mortgage, or other instrument or agreement from which the life insurance company derives interest, rents, or royalties, and " (C) the alteration or termination of any instrument or agreement described in subparagraph (B). "(2) SHORT-TERM CAPITAL GAIN.—In the case of a taxable year beginning after December 31, 1958, the amount (if any) by which the net short-term capital gain exceeds the net long-term capital loss. "(3) TRADE OR BUSINESS INCOME.—The gross income from any trade or business (other than an insurance business) carried on by the life insurance company, or by a partnership of which the life insurance company is a partner. I n computing gross income under this paragraph, there shall be excluded any item described in paragraph (1). Except as provided in paragraph (2), in computing gross investment income under this subsection, 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. "(c) INVESTMENT YIELD DEFINED.—For purposes of this part, the term 'investment yield' means the gross investment income less the following deductions— "(1) INVESTMENT EXPENSES.—Investment expenses for the taxable year. If any general expenses are in part assigned to or included in the investment expenses, the total deduction under this paragraph shall not exceed the sum of— " (A) one-fourth of one percent of the mean of the assets (as defined in section 805(b)(4)) held at the beginning and end of the taxable year, " (B) the amount of the mortgage service fees for the taxable year, plus " (C) whichever of the following is the greater: "(i) one-fourth of the amount by which the investment yield (computed without any deduction for investment expenses allowed by this paragraph) exceeds 3 % percent of the mean of the assets (as defined in section 805(b)(4)) held at the beginning and end of the taxable year, reduced by the amount described in subparagraph (B), or "(li) one-fourth of one percent of the mean of the value of mortgages held at the beginning and end of the taxable year for which there are no mortgage service fees for the taxable year. "(2) REAL ESTATE EXPENSES.—The amount of taxes (as provided in section 164), and other expenses, for the taxable year exclusively on or with respect to the real estate owned by the company. No deduction shall be allowed under this paragraph for any amount paid out for new buildings, or for permanent improvements or betterments made to increase the value of any property. "(3) DEPRECIATION.—The deduction allowed by section 167. The deduction under this paragraph and paragraph (2) on account of any real estate owned and occupied for insurance purposes in whole or in part by a life insurance company shall be limited to an amount which bears the same ratio to such deduction (computed without regard to this sentence) as the rental value of the space not so occupied bears to the rental value of the entire property.
117
26 USC 164.
26 USC i67.
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