Gulf Life Insurance v. United States

OPINION

MARGOLIS, Judge.

This federal income tax refund case, requiring the application of the Life Insurance Company Income Tax Act of 1959, is before the court on the parties’ cross-motions for summary judgment. The question is whether dividends, paid by the taxpayer to holders of its participating life insurance policies and reimbursed to the taxpayer by a reinsurer under a modified indemnity coinsurance agreement, should be treated as policyholder dividends paid by the reinsurer, as plaintiff claims, or whether the dividends are deductible by the taxpayer and the reimbursements are income…