26 U.S.C. § 845 — Certain reinsurance agreements
submitted 42 years ago by Pub. L. 98-369 to r/title-26-INTERNAL-REVENUE-CODE · 219 words · no verdicts yet
This section lets the Secretary adjust tax items in certain related-party reinsurance arrangements. The Secretary may also adjust a contract that has a significant tax-avoidance effect.
(a) If two or more related persons, as defined in section 482, are parties to a reinsurance agreement, or one party effectively acts as another party’s agent or as a conduit between related persons for a covered contract, the Secretary* may (1) allocate among them income, deductions, assets, reserves, credits, and other related items, including investment income and premiums; (2) recharacterize those items; or (3) make another adjustment. The Secretary may do this if the Secretary decides it is needed to show the proper amount, source, or character of each person’s taxable income or related item.
(b) If the Secretary decides a reinsurance contract has a significant tax-avoidance effect on a party, the Secretary may make proper adjustments for that party to remove the effect. This may include treating the contract as ending on December 31 of every year and beginning again on January 1 of the next year.
In the case of 2 or more related persons (within the meaning of section 482) who are parties to a reinsurance agreement (or where one of the parties to a reinsurance agreement is, with respect to any contract covered by the agreement, in effect an agent of another party to such agreement or a conduit between related persons), the Secretary* may—
allocate between or among such persons income (whether investment income, premium, or otherwise), deductions, assets, reserves, credits, and other items related to such agreement,
recharacterize any such items, or
make any other adjustment,
if he determines that such allocation, recharacterization, or adjustment is necessary to reflect the proper amount, source, or character of the taxable income (or any item described in paragraph (1) relating to such taxable income) of each such person.
If the Secretary determines that any reinsurance contract has a significant tax avoidance effect on any party to such contract, the Secretary may make proper adjustments with respect to such party to eliminate such tax avoidance effect (including treating such contract with respect to such party as terminated on December 31 of each year and reinstated on January 1 of the next year).
Source credit: (Added Pub. L. 98–369, div. A, title II, § 212(a), July 18, 1984, 98 Stat. 757; amended Pub. L. 108–357, title VIII, § 803(a), Oct. 22, 2004, 118 Stat. 1569.)
- 1984Enacted · Pub. L. 98-369 · 98 Stat. 757
- 2004Amended · Pub. L. 108-357 · 118 Stat. 1569
A history note hasn’t been published yet. The record shows enactment by Pub. L. 98-369 on 1984-07-18.
all 0 arguments · sorted by: best
no arguments yet — make the first case