Code of Federal Regulations (alpha)

CFR /  Title 26  /  Part 1  /  Sec. 1.809-9 Computation of the differential earnings rate and the

(a) In general. Neither the differential earnings rate under section 809(c) nor the recomputed differential earnings rate that is used in computing the recomputed differential earnings amount under section 809(f)(3) may be less than zero.

(b) Definitions--(1) Recomputed differential earnings amount. The recomputed differential earnings amount, with respect to any taxable year, is the amount equal to the product of--

(1) Recomputed differential earnings amount. The recomputed differential earnings amount, with respect to any taxable year, is the amount equal to the product of--

(i) The life insurance company's average equity base for the taxable year; multiplied by

(ii) The recomputed differential earnings rate for that taxable year.

(2) Recomputed differential earnings rate. The recomputed differential earnings rate for any taxable year equals the excess of--

(i) The imputed earnings rate for the taxable year; over

(ii) The average mutual earning rate for the calendar year in which the taxable year begins.

(c) Effective date. The regulations are effective for all taxable years beginning after December 31, 1986. [T.D. 8499, 58 FR 64899, Dec. 10, 1993]