Helvering v. Inter-Mountain Life Insurance

The question for decision is whether assets held by the company in 1922 against matured and unpaid coupons attached to 20-payment life coupon nonparticipating policies, constituted a reserve fund required by law within the meaning of § 245 (a) (2) of the Revenue Act of 1921.

That section declares that net income means gross income less, among other permissible deductions, an amount equal to four per cent, of the mean of the “ reserve funds required by law ” held at the beginning and end of the taxable year. Respondent, a stock company, incorporated under Utah law and commenced business in…