Massachusetts Mutual Life Insurance v. United States

The question in this case is whether, the petitioner, a Massachusetts life insurance company operating on the mutual level premium plan, is entitled, under § 245- of the Revenue Act of 1926, 1 to deduct from its gross income, as interest paid, the amount of interest credited to its policyholders during the taxable year, but not withdrawn by them.

Petitioner.agrees to repay a portion of its receipts to policyholders in the form of dividends. The policies provide that these dividends, when declared, may at the option of the insured be withdrawn in cash, applied as premium payments, or allowed to…