New York Life Ins. Co. v. Edwards
271 U.S. 109 (1926)

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U.S. Supreme Court

New York Life Ins. Co. v. Edwards, 271 U.S. 109 (1926)

New York Life Insurance Company v. Edwards

Nos. 712, 804

Argued March 2, 3, 1926

Decided April 19, 1926

271 U.S. 109

Syllabus

1. The proviso of the Revenue Act of 1913, § II G(b),

"[t]hat . . . life insurance companies shall not include as income in any year such portion of any actual premium received from any individual policyholder as shall have been paid back or credited to such individual policyholder, or treated as an abatement of premium of such individual policyholder, within such year . . ."

does not apply to overpayments by deferred-dividend policyholders of a mutual level premium company which, though formally credited to the respective policyholders, are held in the aggregate for apportionment and distribution to the survivors in good standing at the end of a prescribed period of time. P. 271 U. S. 115.

2. Annual additions made by a life insurance company to a fund accumulated for the amortization of the premiums paid on its investments in bonds above par are not deductible from gross income under § II G(b), supra, as "losses actually sustained within the year." P. 271 U. S. 116.

3. The estimated value of the future premiums waived by a policy stipulation exempting the insured from further premiums on proof of total and permanent disability held not deductible from gross income under § II G(b), supra, as part of "the net addition required by law to be made within the year to reserve funds." P. 271 U. S. 117.

4. A special fund required by a state Superintendent of Insurance to be set aside to meet unreported losses due to death of policyholders held not an addition to reserve funds required.by law. P. 271 U. S. 119.

5. The compensation which an insurance company agrees to pay soliciting agents has no relation to the reserve held to meet maturing policies, and when it sets aside a fund to provide payments to such agents, this cannot be regarded as a reserve within intendment of the statute. P. 271 U. S. 119.

8 F.2d 851 reversed.

Page 271 U. S. 110

Certiorari to a judgment of the circuit court of appeals which affirmed in part a judgment of the district court (3 Fed. 2d 280) allowing recovery on various items demanded by the Insurance Company in a suit against the Collector to regain alleged excessive income tax payments. Certiorari was applied for and allowed on both sides.

Page 271 U. S. 114

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