Commissioner v. Illinois Life Ins.

LINDLEY, District Judge.

The Revenue Act of 1928, c. 852, 45 Stat. 791, § 203 (26 U.S.C.A. § 203 note), provides that net income of life insurance companies shall include gross income, less, among other items, “4 per centum of the mean of the reserve funds required by law and held at the beginning and end of the taxable year.” In pursuance of this provision, in reporting its income, the respondent deducted, from its gross income for the year 1929, 4 per cent, of the mean of a reserve carried by it, in accordance with the Illinois statute, termed “survivor-ship investment fund.” The…