Except as otherwise provided in paragraphs (2) and (3), subsection (d), subsection (f), and subsection (j), gross income does not include amounts received (whether in a single sum or otherwise) under a life insurance contract, if such amounts are paid by reason of the death of the insured.
In the case of a transfer for a valuable consideration, by assignment or otherwise, of a life insurance contract or any interest therein, the amount excluded from gross income by paragraph (1) shall not exceed an amount equal to the sum of the actual value of such consideration and the premiums and other amounts subsequently paid by the transferee. The preceding sentence shall not apply in the case of such a transfer-
The term "other amounts" in the first sentence of this paragraph includes interest paid or accrued by the transferee on indebtedness with respect to such contract or any interest therein if such interest paid or accrued is not allowable as a deduction by reason of section 264(a)(4).
The second sentence of paragraph (2) shall not apply in the case of a transfer of a life insurance contract, or any interest therein, which is a reportable policy sale.
For purposes of this paragraph, the term "reportable policy sale" means the acquisition of an interest in a life insurance contract, directly or indirectly, if the acquirer has no substantial family, business, or financial relationship with the insured apart from the acquirer's interest in such life insurance contract. For purposes of the preceding sentence, the term "indirectly" applies to the acquisition of an interest in a partnership, trust, or other entity that holds an interest in the life insurance contract.
If any amount excluded from gross income by subsection (a) is held under an agreement to pay interest thereon, the interest payments shall be included in gross income.
The amounts held by an insurer with respect to any beneficiary shall be prorated (in accordance with such regulations as may be prescribed by the Secretary) over the period or periods with respect to which such payments are to be made. There shall be excluded from the gross income of such beneficiary in the taxable year received any amount determined by such proration. Gross income includes, to the extent not excluded by the preceding sentence, amounts received under agreements to which this subsection applies.
An amount held by an insurer with respect to any beneficiary shall mean an amount to which subsection (a) applies which is-
This subsection shall not apply to any amount to which subsection (c) is applicable.
Any amount paid by reason of the death of the insured under a flexible premium life insurance contract issued before January 1, 1985 shall be excluded from gross income only if-
For purposes of this subsection-
The term "guideline premium limitation" means, as of any date, the greater of-
The term "guideline single premium" means the premium at issue with respect to future benefits under the contract (without regard to any qualified additional benefit), and with respect to any charges for qualified additional benefits, at the time of a determination under subparagraph (A) or (E) and which is based on-
The term "guideline level premium" means the level annual amount, payable over the longest period permitted under the contract (but ending not less than 20 years from date of issue or not later than age 95, if earlier), computed on the same basis as the guideline single premium, except that subparagraph (B)(ii) shall be applied by substituting "4 percent" for "6 percent".
In computing the guideline single premium or guideline level premium under subparagraph (B) or (C)-
The guideline single premium and guideline level premium shall be adjusted in the event of a change in the future benefits or any qualified additional benefit under the contract which was not reflected in any guideline single premiums or guideline level premium previously determined.
For purposes of this subsection-
The terms "flexible premium life insurance contract" and "contract" mean a life insurance contract (including any qualified additional benefits) which provides for the payment of one or more premiums which are not fixed by the insurer as to both timing and amount. Such terms do not include that portion of any contract which is treated under State law as providing any annuity benefits other than as a settlement option.
The term "premiums paid" means the premiums paid under the contract less any amounts (other than amounts includible in gross income) to which section 72(e) applies. If, in order to comply with the requirements of paragraph (1)(A), any portion of any premium paid during any contract year is returned by the insurance company (with interest) within 60 days after the end of a contract year-
The term "applicable percentage" means-
The cash value of any contract shall be determined without regard to any deduction for any surrender charge or policy loan.
The term "qualified additional benefits" means any-
The payment of a premium which would result in the sum of the premiums paid exceeding the guideline premium limitation shall be disregarded for purposes of paragraph (1)(A)(i) if the amount of such premium does not exceed the amount necessary to prevent the termination of the contract without cash value on or before the end of the contract year.
In computing the net single premium under paragraph (1)(B)-
If the taxpayer establishes to the satisfaction of the Secretary that-
the Secretary may waive the failure to satisfy such requirements.
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection.
For purposes of this section, the following amounts shall be treated as an amount paid by reason of the death of an insured:
If any portion of the death benefit under a life insurance contract on the life of an insured described in paragraph (1) is sold or assigned to a viatical settlement provider, the amount paid for the sale or assignment of such portion shall be treated as an amount paid under the life insurance contract by reason of the death of such insured.
The term "viatical settlement provider" means any person regularly engaged in the trade or business of purchasing, or taking assignments of, life insurance contracts on the lives of insureds described in paragraph (1) if-
A person meets the requirements of this clause with respect to an insured who is a terminally ill individual if such person-
A person meets the requirements of this clause with respect to an insured who is a chronically ill individual if such person-
In the case of an insured who is a chronically ill individual-
Paragraphs (1) and (2) shall not apply to any payment received for any period unless-
For purposes of the preceding sentence, the rule of section 7702B(b)(2)(B) shall apply.
The requirements applicable under this subparagraph are-
A payment shall not fail to be described in subparagraph (A) by reason of being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payment relates.
For limitation on amount of periodic payments which are treated as described in paragraph (1), see section 7702B(d).
For purposes of this subsection-
The term "terminally ill individual" means an individual who has been certified by a physician as having an illness or physical condition which can reasonably be expected to result in death in 24 months or less after the date of the certification.
The term "chronically ill individual" has the meaning given such term by section 7702B(c)(2); except that such term shall not include a terminally ill individual.
The term "qualified long-term care services" has the meaning given such term by section 7702B(c).
The term "physician" has the meaning given to such term by section 1861(r)(1) of the Social Security Act (42 U.S.C. 1395x(r)(1)).
This subsection shall not apply in the case of any amount paid to any taxpayer other than the insured if such taxpayer has an insurable interest with respect to the life of the insured by reason of the insured being a director, officer, or employee of the taxpayer or by reason of the insured being financially interested in any trade or business carried on by the taxpayer.
Gross income shall not include any amount paid as a survivor annuity on account of the death of a public safety officer (as such term is defined in section 1204 of the Omnibus Crime Control and Safe Streets Act of 1968, as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013) killed in the line of duty-
Paragraph (1) shall not apply with respect to the death of any public safety officer if, as determined in accordance with the provisions of the Omnibus Crime Control and Safe Streets Act of 1968-
Gross income does not include amounts (whether in a single sum or otherwise) paid by an employer by reason of the death of an employee who is a specified terrorist victim (as defined in section 692(d)(4)).
Subject to such rules as the Secretary may prescribe, paragraph (1) shall not apply to amounts which would have been payable after death if the individual had died other than as a specified terrorist victim (as so defined).
Subparagraph (A) shall not apply to incidental death benefits paid from a plan described in section 401(a) and exempt from tax under section 501(a).
For purposes of paragraph (1), the term "employee" includes a self-employed individual (as defined in section 401(c)(1)).
The provisions of this subsection shall apply to any astronaut whose death occurs in the line of duty.
In the case of an employer-owned life insurance contract, the amount excluded from gross income of an applicable policyholder by reason of paragraph (1) of subsection (a) shall not exceed an amount equal to the sum of the premiums and other amounts paid by the policyholder for the contract.
In the case of an employer-owned life insurance contract with respect to which the notice and consent requirements of paragraph (4) are met, paragraph (1) shall not apply to any of the following:
Any amount received by reason of the death of an insured who, with respect to an applicable policyholder-
Any amount received by reason of the death of an insured to the extent-
For purposes of this subsection, the term "employer-owned life insurance contract" means a life insurance contract which-
For purposes of the preceding sentence, if coverage for each insured under a master contract is treated as a separate contract for purposes of sections 817(h), 7702, and 7702A, coverage for each such insured shall be treated as a separate contract.
For purposes of this subsection-
The term "applicable policyholder" means, with respect to any employer-owned life insurance contract, the person described in subparagraph (A)(i) which owns the contract.
The term "applicable policyholder" includes any person which-
The notice and consent requirements of this paragraph are met if, before the issuance of the contract, the employee-
For purposes of this subsection-
The term "employee" includes an officer, director, and highly compensated employee (within the meaning of section 414(q)).
The term "insured" means, with respect to an employer-owned life insurance contract, an individual covered by the contract who is a United States citizen or resident. In the case of a contract covering the joint lives of 2 individuals, references to an insured include both of the individuals.
26 U.S.C. § 101
EDITORIAL NOTES
REFERENCES IN TEXTThe Omnibus Crime Control and Safe Streets Act of 1968, referred to in subsec. (h), is Pub. L. 90-351, June 19, 1968, 82 Stat. 197. Section 1204 of the Act is classified to section 10284 of Title 34, Crime Control and Law Enforcement. Section 1204 of the Act, as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013, means section 1204 prior to its amendment by Pub. L. 112-239, div. A, title X, §1086(b)(1)(E), Jan. 2, 2013, 126 Stat. 1967. For complete classification of this Act to the Code, see Short Title of 1968 Act note set out under section 10101 of Title 34 and Tables.
CODIFICATIONAnother section 1084(b) of Pub. L. 105-34 amended sections 805, 807, 812, and 832 of this title.
AMENDMENTS2017-Subsec. (a)(1). Pub. L. 115-97, §13522(b), substituted "paragraphs (2) and (3)" for "paragraph (2)". Subsec. (a)(3). Pub. L. 115-97, §13522(a), added par. (3).2013-Subsec. (h)(1). Pub. L. 112-239 inserted ", as in effect immediately before the enactment of the National Defense Authorization Act for Fiscal Year 2013" after "1968" in introductory provisions.2006-Subsec. (a)(1). Pub. L. 109-280, §863(c)(1), substituted "subsection (f), and subsection (j)" for "and subsection (f)".Subsec. (j). Pub. L. 109-280, §863(a), added subsec. (j).2003-Subsec. (i). Pub. L. 108-121, §110(b)(2), inserted "or astronauts" after "victims" in heading.Subsec. (i)(4). Pub. L. 108-121, §110(b)(1), added par. (4).2002-Subsec. (i). Pub. L. 107-134 added subsec. (i).1997-Subsec. (a)(2). Pub. L. 105-34, §1084(b)(2), inserted at end "The term 'other amounts' in the first sentence of this paragraph includes interest paid or accrued by the transferee on indebtedness with respect to such contract or any interest therein if such interest paid or accrued is not allowable as a deduction by reason of section 264(a)(4)."Subsec. (h). Pub. L. 105-34, §1528(a), added subsec. (h).1996-Subsec. (b). Pub. L. 104-188, §1402(a), struck out subsec. (b) which related to employees' death benefits.Subsec. (c). Pub. L. 104-188, §1402(b)(1), substituted "subsection (a)" for "subsection (a) or (b)".Subsec. (g). Pub. L. 104-191 added subsec. (g).1986-Subsec. (d)(1). Pub. L. 99-514, §1001(a), amended second sentence generally, which prior to amendment read as follows: "There shall be excluded from the gross income of such beneficiary in the taxable year received-"(A) any amount determined by such proration, and"(B) in the case of the surviving spouse of the insured, that portion of the excess of the amounts received under one or more agreements specified in paragraph (2)(A) (whether or not payment of any part of such amounts is guaranteed by the insurer) over the amount determined in subparagraph (A) of this paragraph which is not greater than $1,000 with respect to any insured."Subsec. (d)(2)(B). Pub. L. 99-514, §1001(c)(2), substituted "equal" for "is equal" in introductory provisions.Subsec. (d)(2)(B)(ii). Pub. L. 99-514, §1001(b), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: "as discounted on the basis of the interest rate and mortality tables used by the insurer in calculating payments under the agreement." Subsec. (d)(3), (4). Pub. L. 99-514, §1001(c)(1), redesignated par. (4) as (3), and struck out former par. (3), "Surviving spouse", which read as follows: "For purposes of this subsection, the term 'surviving spouse' means the spouse of the insured as of the date of death, including a spouse legally separated but not under a decree of absolute divorce." 1984-Subsec. (b)(3)(B). Pub. L. 98-369, §713(e), amended subpar. (B) generally, substituting "certain distributions" for "certain lump sum distributions" in heading, substituting "amount paid or distributed" for "lump sum distribution described in the second sentence of paragraph (2)(B)" in introductory text and adding cls. (i) and (ii). Subsec. (e). Pub. L. 98-369, §421(b)(2), repealed subsec. (e) relating to payments of alimony or of income of an estate or trust in case of divorce, etc.Subsec. (f). Pub. L. 98-369, §221(b)(2)(B), inserted "issued before January 1, 1985" in heading.Subsec. (f)(1). Pub. L. 98-369, §221(b)(2)(A), inserted "issued before January 1, 1985" in introductory text. 1982-Subsec. (a)(1). Pub. L. 97-248, §266(b), substituted ", subsection (d), and subsection (f)" for "and in subsection (d)".Subsec. (b)(3). Pub. L. 97-248, §239, amended par. (3) generally, substituting "Treatment of self-employed individuals" for "Self-employed individual not considered an employee" in heading, designating existing provisions as subparagraph (A) and, as so designated, adding heading and exception for subpar. (B), and adding subparagraph (B). Subsec. (f). Pub. L. 97-248, §266(a), added subsec. (f).1976-Subsec. (d)(1). Pub. L. 94-455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary". Subsec. (f). Pub. L. 94-455, §1901(a)(16), struck out subsec. (f) relating to effective date of section. 1974-Subsec. (b)(2)(B). Pub. L. 93-406, §2005(c)(15), substituted "a lump sum distribution (as defined in section 402(e)(4)" for "total distributions payable (as defined in section 402(a)(3)) which are paid to a distributee within one taxable year of the distributee by reason of the employee's death".Subsec. (b)(2)(D). Pub. L. 93-406, §2007(b)(3), substituted "if the member or former member of the uniformed services by reason of whose death such annuity is payable" for "if the individual who made the election under such chapter". 1969-Subsec. (b)(2)(B)(iii). Pub. L. 91-172 substituted references to section 170(b)(1)(A) (ii) and (vi), and to religious organizations, for references to section 503(b)(1), (2), or (3). 1966-Subsec. (b)(2)(D). Pub. L. 89-365 provided that par. (1) shall not apply in the case of an annuity under chapter 73 of title 10 if the individual who made the election under that chapter died after attaining retirement age.1962-Subsec. (b)(2)(B)(ii). Pub. L. 87-792, §7(c)(1), substituted "described in section 403(a)" for "which meets the requirements of paragraphs (3), (4), (5), and (6) of section 401(a)".Subsec. (b)(3). Pub. L. 87-792, §7(c)(2), added par. (3).1958-Subsec. (b)(2)(B). Pub. L. 85-866 substituted "This subparagraph shall not apply to total distributions payable (as defined in section 402(a)(3) which are paid to a distributee within one taxable year of the distributee by reason of the employee's death-" for "(other than total distributions payable, as defined in section 402(a)(3), which are paid to distributee, by a stock bonus, pension, or profit-sharing trust described in section 401(a) which is exempt from tax under section 501(a), or under an annuity contract under a plan which meets the requirements of paragraphs (3), (4), (5), and (6) of section 401(a), within one taxable year of the distributee by reason of the employee's death)", and added cls. (i), (ii), and (iii).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2017 AMENDMENT Pub. L. 115-97, §13522(c), Dec. 22, 2017, 131 Stat. 2152, provided that: "The amendments made by this section [amending this section] shall apply to transfers after December 31, 2017."
EFFECTIVE DATE OF 2013 AMENDMENT Amendment by Pub. L. 112-239 effective Jan. 2, 2013, and applicable to matters pending on Jan. 2, 2013, or filed or accruing after that date, with certain exceptions, see section 1086(d) of Pub. L. 112-239, set out as a note under section 10251 of Title 34, Crime Control and Law Enforcement.
EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109-280, §863(d), Aug. 17, 2006, 120 Stat. 1024, provided that: "The amendments made by this section [enacting section 6039I of this title and amending this section] shall apply to life insurance contracts issued after the date of the enactment of this Act [Aug. 17, 2006], except for a contract issued after such date pursuant to an exchange described in section 1035 of the Internal Revenue Code of 1986 for a contract issued on or prior to that date. For purposes of the preceding sentence, any material increase in the death benefit or other material change shall cause the contract to be treated as a new contract except that, in the case of a master contract (within the meaning of section 264(f)(4)(E) of such Code), the addition of covered lives shall be treated as a new contract only with respect to such additional covered lives."
EFFECTIVE DATE OF 2003 AMENDMENT Pub. L. 108-121, §110(b)(3), Nov. 11, 2003, 117 Stat. 1342, provided that: "The amendments made by this subsection [amending this section] shall apply to amounts paid after December 31, 2002, with respect to deaths occurring after such date."
EFFECTIVE DATE OF 2002 AMENDMENT Pub. L. 107-134, §102(b), Jan. 23, 2002, 115 Stat. 2429, provided that:"(1) EFFECTIVE DATE.-The amendment made by this section [amending this section] shall apply to taxable years ending before, on, or after September 11, 2001."(2) WAIVER OF LIMITATIONS.-If refund or credit of any overpayment of tax resulting from the amendments made by this section is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [Jan. 23, 2002] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period."
EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105-34, §1084(d), Aug. 5, 1997, 111 Stat. 955, as amended by Pub. L. 105-206, §6010(o)(3)(B), July 22, 1998, 112 Stat. 816, provided that: "The amendments made by this section [amending this section and sections 264, 265, 805, 807, 812, and 832 of this title] shall apply to contracts issued after June 8, 1997, in taxable years ending after such date. For purposes of the preceding sentence, any material increase in the death benefit or other material change in the contract shall be treated as a new contract except that, in the case of a master contract (within the meaning of section 264(f)(4)(E) of the Internal Revenue Code of 1986), the addition of covered lives shall be treated as a new contract only with respect to such additional covered lives. For purposes of this subsection, an increase in the death benefit under a policy or contract issued in connection with a lapse described in section 501(d)(2) of the Health Insurance Portability and Accountability Act of 1996 [Pub. L. 104-191, set out as a note under section 264 of this title] shall not be treated as a new contract." Pub. L. 105-34, §1528(b), Aug. 5, 1997, 111 Stat. 1075, as amended by Pub. L. 107-15, §2, June 5, 2001, 115 Stat. 37, provided that: "The amendments made by this section [amending this section] shall apply to amounts received in taxable years beginning after December 31, 1996, with respect to individuals dying after such date, and to amounts received in taxable years beginning after December 31, 2001, with respect to individuals dying on or before December 31, 1996."
EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104-191, §331(b), Aug. 21, 1996, 110 Stat. 2069, provided that: "The amendment made by subsection (a) [amending this section] shall apply to amounts received after December 31, 1996." Pub. L. 104-188, §1402(c), Aug. 20, 1996, 110 Stat. 1790, provided that: "The amendments made by this section [amending this section and sections 406, 407, and 7701 of this title] shall apply with respect to decedents dying after the date of the enactment of this Act [Aug. 20, 1996]."
EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99-514, title X, §1001(d), Oct. 22, 1986, 100 Stat. 2387, provided that: "The amendments made by this section [amending this section] shall apply to amounts received with respect to deaths occurring after the date of the enactment of this section [Oct. 22, 1986] in taxable years ending after such date."
EFFECTIVE DATE OF 1984 AMENDMENT Amendment by section 221(b)(2) of Pub. L. 98-369 effective Jan. 1, 1984, see section 221(d)(4) of Pub. L. 98-369, set out as an Effective Date note under section 7702 of this title.Amendment by section 421(b)(2) of Pub. L. 98-369 applicable to transfers after July 18, 1984, in taxable years ending after such date, subject to election to have repeal apply to transfers after 1983 or to transfers pursuant to existing decrees, see section 421(d) of Pub. L. 98-369, set out as an Effective Date note under section 1041 of this title.Amendment by section 713 of Pub. L. 98-369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, to which such amendment relates, see section 715 of Pub. L. 98-369, set out as a note under section 31 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97-248, title II, §266(c)(1), Sept. 3, 1982, 96 Stat. 550, as amended by Pub. L. 98-369, div. A, title II, §221(b)(1), July 18, 1984, 98 Stat. 772, provided that: "The amendments made by this section [amending this section] shall apply to contracts entered into before January 1, 1985."Amendment by section 239 of Pub. L. 97-248 applicable to decedents dying after Dec. 31, 1983, see section 241(b) of Pub. L. 97-248, set out as an Effective Date note under section 416 of this title. Such amendment is applicable, in the case of amounts received under the plan of an S corporation, with respect to decedents dying after Dec. 31, 1982, notwithstanding section 241(b) of Pub. L. 97-248, see section 6(b)(2) of Pub. L. 97-354, Oct. 19, 1982, 96 Stat. 1697, set out as a note under section 1361 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT Amendment by section 1901(a)(16) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title. Amendment by section 1906(b)(13)(A) of Pub. L. 94-455 effective Feb. 1, 1977, see section 1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013 of this title.
EFFECTIVE DATE OF 1974 AMENDMENT Amendment by section 2005(c)(15) of Pub. L. 93-406 applicable only with respect to distributions and payments made after Dec. 31, 1973, in taxable years beginning after Dec. 31, 1973, see section 2005(d) of Pub. L. 93-406, set out as a note under section 402 of this title.Amendment by section 2007(b)(3) of Pub. L. 93-406 applicable to taxable years ending on or after Sept. 21, 1972, with respect to individuals dying on or after Sept. 21, 1972, see section 2007(c) of Pub. L. 93-406, set out as a note under section 122 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91-172, set out as an Effective Date note under section 4940 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89-365 applicable with respect to individuals making an election under chapter 73 of Title 10 who died after Dec. 31, 1965, see section 1(d) of Pub. L. 89-365, set out as an Effective Date note under section 122 of this title.
EFFECTIVE DATE OF 1962 AMENDMENT Amendment by Pub. L. 87-792 applicable to taxable years beginning after Dec. 31, 1962, see section 8 of Pub. L. 87-792, set out as a note under section 22 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85-866 applicable to taxable years beginning after Dec. 31, 1957, see section 23(g) of Pub. L. 85-866, set out as a note under section 403 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1998For provisions directing that if any amendments made by subtitle D [§§1401-1465] of title I of Pub. L. 104-188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of Pub. L. 104-188, set out as a note under section 401 of this title.
FLEXIBLE PREMIUM CONTRACTS ISSUED DURING 1984 WHICH MEET REQUIREMENTS OF SECTION 7702 TREATED AS MEETING REQUIREMENTS OF SECTION 101(F)Flexible premium contracts issued during 1984 which meet requirements of section 7702 of this title treated as meeting requirements of subsec. (f) of this section, see section 221(b)(3) of Pub. L. 98-369, as added by Pub. L. 99-514, set out as a note under section 7702 of this title.
SPECIAL RULES FOR CONTRACTS ENTERED INTO BEFORE JANUARY 1, 1983Pub. L. 97-248, title II, §266(c)(2), (3), Sept. 3, 1982, 96 Stat. 550, as amended by Pub. L. 97-448, title III, §306(a)(13), Jan. 12, 1983, 96 Stat. 2405; Pub. L. 99-514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:"(2) SPECIAL RULE FOR CONTRACTS ENTERED INTO BEFORE JANUARY 1, 1983.-Any contract entered into before January 1, 1983, which meets the requirements of section 101(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] on the date which is 1 year after the date of the enactment of this Act [Sept. 3, 1982] shall be treated as meeting the requirements of such section for any period before the date on which such contract meets such requirements. Any death benefits paid under a flexible premium life insurance contract (within the meaning of section 101(f)(3)(A) of such Code) before the date which is 1 year after such date of enactment [Sept. 3, 1982] shall be excluded from gross income. "(3) SPECIAL RULE FOR CERTAIN CONTRACTS.-Any contract entered into before January 1, 1983, shall be treated as meeting the requirements of subparagraph (A) of section 101(f)(1) of such Code if such contract would meet such requirements if section 101(f)(2)(C) of such Code were applied by substituting '3 percent' for '4 percent'."
- Internal Revenue Code of 1986
- The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- fiscal year
- The term "fiscal year" means an accounting period of 12 months ending on the last day of any month other than December.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- shareholder
- The term "shareholder" includes a member in an association, joint-stock company, or insurance company.
- stock
- The term "stock" includes shares in an association, joint-stock company, or insurance company.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.