Example 1: Insurance Company X, which is licensed as a life insurance company in New York State and subject to tax under section 1501, owns 100% of the voting power of the capital stock of Corporation Y, a general business corporation subject to tax under article 9-A. Corporation Y owns 75% of the voting stock of a captive REIT. Because over 50% of the voting power of the capital stock of the captive REIT is not directly owned or controlled by a life insurance corporation subject to tax or required to be included in a combined return under article 33 and the closest controlling stockholder of the captive REIT is a life insurance company, the captive REIT must be included in a combined return with Insurance Company X.
Example 2: Insurance Company X, which is licensed as a life insurance company in New York and subject to tax under section 1501, owns 100% of the voting power of the capital stock of Corporation Y, a general business corporation subject to tax under article 9-A. Corporation Y owns 100% of the voting power of the capital stock of Corporation Z, also a general business corporation subject to tax under article 9-A. Corporations Y and Z are engaged in a unitary business. Corporation Z owns 100% of the voting power of the capital stock in a captive RIC. Corporation Y is the closest controlling stockholder in the captive RIC. Because over 50% of the voting power of the capital stock of the captive RIC is not directly owned or controlled by Insurance Company X, and the closest controlling stockholder in the captive RIC is not a life insurance corporation subject to tax under article 33, the captive RIC is required to be included in a combined report under article 9-A with Corporations Y and Z.
Example 3: Same facts as in Example 2 except that Corporations Y and Z are not engaged in a unitary business. In this case, the captive RIC is required to be included in a combined report with Corporation Z.
N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 9-4.4