Springfield Mut. Asso. v. Commissioner

*777 The Commissioner determined a deficiency in income tax for 1920 in the amount of $39.48. The only issue in controversy is whether an amount of $5,000 deposited in 1919 with the Superintendent of the Insurance Department of Missouri at the time the petitioner *778 was organized, and as required by the state statutes applicable to corporations of the character of the petitioner, constitutes an allowable deduction from gross income in 1920.

FINDINGS OF FACT.

Petitioner was duly organized and incorporated under the laws of Missouri in the year 1919, as a mutual assessment life insurance company.

Prior to the issuance of its charter, it was required to deposit the amount of $5,000 in cash in a bank to the credit of the beneficiary fund of the proposed corporation and to give satisfactory assurance to the Superintendent of the Insurance Department of the State of Missouri that the said sum of $5,000 would not be used for any other purpose than for the payment of death losses or other benefits provided for in the policies or certificates issued*3724 by such proposed corporation.

The said amount of $5,000 was deposited in the manner and for the purposes indicated above, and the Superintendent of the Insurance Department of Missouri issued his certificate to that effect on March 21, 1919.

The foregoing amount deposited under the requirements of ch. 50, article III, section 6156, Revised Statutes of Missouri, 1919, was not claimed as a deduction on the petitioner's return for 1920, and has not been allowed as a deduction for 1920 by the Commissioner.

OPINION.

LITTLETON: The parties have stipulated the foregoing facts, as well as that the only issue in controversy is whether the $5,000 deposited in 1919 constituted a deduction for 1920 under the provisions of section 234(a) 10(a) of the Revenue Act of 1918 which provides that, in addition to deductions allowable to other corporations, there shall be allowed in the case of insurance companies:

The net addition required by law to be made within the taxable year to reserve funds (including in the case of assessment insurance companies the actual deposit of sums with State or Territorial officers pursuant to law as additions to guarantee or reserve funds).

Since the amount*3725 here in question was deposited in 1919, and not in the year involved in this proceeding, the Board finds no reason under the above provision, or under any other provision, of the Revenue Act of 1918, for allowing this amount as deduction from gross income for 1920.

Judgment will be entered for the respondent.