Wayne Title & Trust Co. v. Commissioner of Internal Revenue

HASTIE, Circuit Judge.

In issue here is the status for income tax purposes of a percentage of title insurance premiums received by the taxpayer, an insurer, and set aside by it during the taxable year, in a “reinsurance reserve fund” in compliance with a state statute.

The taxpayer is a Pennsylvania corporation authorized to engage in a general banking, trust and title insurance business. A Pennsylvania statute regarding title insurance provides, among other things, that one engaging in the title insurance business must establish and maintain a reinsurance reserve fund so long as any policies…