Union Mutual Life Insurance Company, Plaintiff-Appellee-Cross v. United States of America, Defendant-Appellant-Cross

TUTTLE, Circuit Judge.

This is an appeal by the United States and a cross-appeal by the Union Mutual Life Insurance Company from the judgment of the trial court which resolved four of the grounds stated in Union Mutual’s complaint in its favor and two in the Government’s favor. The United States appealed only with respect to two of the matters which the trial court decided in favor of Union Mutual. See Union Mutual Life Ins. Co. v. United States, 420 F.Supp. 1181 (D.Me.1976).

INTRODUCTION: THE TAXING FORMULA

We adopt the trial court’s statement as a concise and accurate description of the…