Cuesta Title Guaranty Co. v. Commissioner
United States Tax Court
Petitioner was engaged in the business of examining land titles and offering title insurance service as an underwritten title company pursuant to California law. Petitioner established reserves for unearned premiums and reserves for unpaid losses, computed in accordance with reserve requirements applicable under California law to a title insurer.
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Petitioner was engaged in the business of examining land titles and offering title insurance service as an underwritten title company pursuant to California law. Petitioner established reserves for unearned premiums and reserves for unpaid losses, computed in accordance with reserve requirements applicable under California law to a title insurer. Held, since petitioner does not bear the economic risk of loss on the insurance contracts issued, it is not an insurance company taxable under sec. 831, I.R.C. 1954, and thus is not entitled to deductions for its reserves for losses.
1Opinion of the Court
Wilbur, Judge:
Respondent determined the following deficiencies in petitioner’s Federal income tax:
Year Deficiency
1971. $4,939
1972. 9,035
The sole issue for decision is whether Cuesta Title Guaranty Co. (hereinafter petitioner) qualifies as an “insurance company” within the meaning of section 831.1
FINDINGS OF FACT
Petitioner is a corporation organized and in good standing under the laws of California, with its principle office and place of business in San Luis Obispo, Calif. It prepared its Federal income tax returns (Forms 1120) for calendar years 1971 and 1972 on the accrual basis and under…
2Cases cited14 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Brown v. HelveringSupreme Court of the United States · 1934
- Helvering v. Le GierseSupreme Court of the United States · 1941
- Bowers v. Lawyers Mortgage Co.Supreme Court of the United States · 1932
- United States v. Cambridge Loan & Building Co.Supreme Court of the United States · 1928
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3Cited by6 opinions
- Anesthesia Service Medical Group, Inc. v. CommissionerUnited States Tax Court · 1985
- Anesthesia Service Medical Group, Inc. v. CommissionerUnited States Tax Court · 1985
- Cuesta Title Guaranty Co. v. CommissionerUnited States Tax Court · 1978
- Cuesta Title Guaranty Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1981
- Pariseau v. CommissionerUnited States Tax Court · 1985
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