(6) The term "losses incur- (6) The term "losses inred" means losses incurred dur-curred" means losses incurred ing the taxable year on insurance during the taxable year on incontracts, computed as follows: surance contracts, computed as follows: To losses paid during the tax- To losses paid during the taxable year, add salvage and rein- able year, add salvage and surance recoverable outstanding reinsurance recoverable outat the end of the preceding tax-standing at the end of the preable year, and deduct salvage ceding taxable year, and deduct and reinsurance recoverable out- salvage and reinsurance recoverstanding at the end of the tax- able outstanding at the end of able year. To the result so the taxable year. To the results obtained add all unpaid losses so obtained add all unpaid losses outstanding at the end of the outstanding at the end of the taxable year and deduct unpaid taxable year and deduct unpaid losses outstanding at the end of losses outstanding at the end of the preceding taxable year; the preceding taxable year; (7) The term "expenses incurred" means all expenses (7) The term "expenses incurred" means all expenses shown on the annual statement shown on the annual statement approved by the National Con- approved by the National Convention of Insurance Commis-vention of Insurance Commissioners, and shall be computed sioners, and shall be computed as follows: as follows: To all expenses paid during To all expenses paid during the taxable year add expenses the taxable year add expenses unpaid at the end of the taxable unpaid at the end of the taxable year and deduct expenses unpaid year and deduct expenses unat the end of the preceding tax-paid at the end of the preceding able year. For the purpose of taxable year. For the purpose computing the net income sub- of computing the net income ject to the tax imposed by this subject to the tax imposed by section there shall be deducted this section there shall be defrom expenses incurred as de- ducted from expenses incurred fined in this paragraph all ex- as defined in this paragraph all penses incurred which are not expenses incurred which are not allowed as deductions by section allowed as deductions by section 247. 247. SEC. 247. (a) In computing SEC. 247. (a) That in computthe net income of an insurance ing the net income of an insurcompany subject to the tax im-ance company subject to the tax posed by section 246 there shall imposed by section 246 there be allowed as deductions: (1) All ordinary and necessary expenses incurred, as provided in paragraph (1) of subdivision (a) of section 234,314 (2) All interest as provided in paragraph (2) of subdivision (a) of section 234;314 (3) Taxes as provided in paragraph (3) of subdivision (a) of section 234,314 (4) Losses incurred; (5) Bad debts in the nature of agency balances and bills re shall be allowed as deductions: (1) All ordinary and necessary expenses incurred, as provided in paragraph (1) of subdivision (a) of section 234;314 (2) All interest as provided in paragraph (2) of subdivision (a) of section 234;314 (3) Taxes as provided in paragraph (3) of subdivision (a) of section 234;314 (4) Losses incurred; (5) Bad debts in the nature of agency balances and bills re 314 Sec. 234 (a) (1), (2), (3), and (6), pp. 192, 196, 198. ceivable ascertained to be worth-ceivable ascertained to be worth- (6) The amount received as (6) The amount received as (8) A reasonable allowance for the exhaustion, wear and tear of property, as provided in paragraph (7) of subdivision (a) of section 234;317 (9) In the case of such a domestic insurance company, the net income of which (computed without the benefit of this paragraph) is $25,000 or less, the sum of $2,000; but if the net income is more than $25,000 the tax imposed by section 246 shall not exceed the tax which would be payable if the $2,000 credit were allowed, plus the amount of the net income in excess of $25,000. SEC. 247. (b) In the case of a foreign corporation the deductions allowed in this section shall be allowed to the extent provided in subdivision (b) of section 234.318 SEC. 247. (c) Nothing in this section or in section 246 shall be construed to permit the same item to be twice deducted. (7) The amount of interest earned during the taxable year which under paragraph (4) of subdivision (b) of section 213315 is exempt from taxation under this title, and the amount of interest allowed as a credit under subdivision (a) of section 236;316 (8) A reasonable allowance for the exhaustion, wear and tear of property, as provided in paragraph (7) of subdivision (a) of section 234;317 (9) In the case of such a domestic insurance company, the net income of which (computed without the benefit of this paragraph) is $25,000 or less, the sum of $2,000; but if the net income is more than $25,000 the tax imposed by section 246 shall not exceed the tax which would be payable if the $2,000 credit were allowed, plus the amount of the net income in excess of $25,000. SEC. 247. (b) In the case of a foreign corporation the deductions allowed in this section shall be allowed to the extent provided in subdivision (b) of section 234.318 SEC. 247. (c) Nothing in this section or in section 246 shall be construed to permit the same item to be twice deducted. Act of 1918. PART IV.-ADMINISTRATIVE RETURNS OF PAYMENTS OF SEC. 254. Every corporation 315 Sec. 213 (b) (4), p. 82. PART IV.-ADMINISTRATIVE PRO- PART IV.-ADMINISTRATIVE PRO RETURNS OF PAYMENTS OF DIVI- RETURNS OF PAYMENTS OF DIVI- SEC. 254. That every corpora SEC. 254. That every corpora 316 Sec. 236 (a), p. 218. |