Example. For the taxable year 1960, X, a life insurance company, has items taken into account under section 809(c) amounting to $150,000, its share of the investment yield amounts to $250,000, and total deductions allowed by section 809(d) of $375,000, exclusive of any operations loss deduction and exclusive of any deduction for dividends received. In 1960, X received as its share of dividends entitled to the benefits of section 243(a) the amount of $100,000. These dividends are included in X's share of the investment yield. X has no other deductions to which section 812(c) applies. On the basis of these facts, X has a loss from operations for the taxable year 1960 of $60,000, computed as follows:
Deductions for 1960 | $375,000 |
Plus: Deduction for dividends received computed without regard to the limitation provided by sec. 246(b), as modified by sec. 809(d)(8)(B) (85% of $100,000) | 85,000 |
Total deductions as modified by sec. 812(c) | 460,000 |
Less: Sum of sec. 809(c) items and X's share of investment yield (including $100,000 of dividends) | 400,000 |
Loss from operations for 1960 | (60,000) |
26 C.F.R. §1.812-3