Kentucky Cent. Life Ins. Co. v. Commissioner
United States Tax Court
Petitioner in 1961 acquired from Guaranty all of Guaranty's Skyland division business under an assumption reinsurance agreement wherein petitioner agreed to assume all the liabilities under the insurance contracts ceded. The stated purchase price was $ 1,800,000, which was allocated by the parties $ 145,000 for real estate transferred, $ 5,000 for office equipment and similar assets transferred, and $ 1,650,000 for the insurance business reinsured by petitioner.
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Petitioner in 1961 acquired from Guaranty all of Guaranty's Skyland division business under an assumption reinsurance agreement wherein petitioner agreed to assume all the liabilities under the insurance contracts ceded. The stated purchase price was $ 1,800,000, which was allocated by the parties $ 145,000 for real estate transferred, $ 5,000 for office equipment and similar assets transferred, and $ 1,650,000 for the insurance business reinsured by petitioner. The purchase price was to be paid by crediting thereon the amount of the reserves required by law or otherwise in connection with…
1Opinion of the Court
Dkennen, Judge:
Respondent determined deficiencies in petitioner’s Federal income tax as follows:
Year Deficiency
1958 _$105,495.82
1959 _ 86,471.00
1960 - 81,586.44
1961 - 138, 001. 24
Certain issues raised in the pleadings have been conceded bj petitioner. The primary issue remaining for our decision herein is whether petitioner understated its premium income in 1961 by the amount of $1,650,000 under the provisions of section 809 (c) (1), I.R.C. 1954,1 with respect to consideration received for assuming liabilities under contracts of insurance not issued by petitioner (assumption reinsurance). If…
2Cases cited3 opinions
- Manhattan Co. of Virginia, Inc. v. CommissionerUnited States Tax Court · 1968
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- International Life Ins. Co. v. CommissionerUnited States Tax Court · 1969
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- Prairie States Life Insurance Co. v. United StatesCourt of Appeals for the Eighth Circuit · 1987
- Mutual Savings Life Insurance Co., Plaintiff-Appellee-Cross v. United States of America, Defendant-Appellant-CrossCourt of Appeals for the Fifth Circuit · 1974
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