[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.501(c)(15)-1]

[Page 30]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.501(c)(15)-1  Mutual insurance companies or associations.

    (a) Taxable years beginning after December 31, 1962. An insurance 
company or association described in section 501(c)(15) is exempt under 
section 501(a) if it is a mutual company or association (other than life 
or marine) or if it is a mutual interinsurer or reciprocal underwriter 
(other than life or marine) and if the gross amount received during the 
taxable year from the sum of the following items does not exceed 
$150,000:
    (1) The gross amount of income during the taxable year from:
    (i) Interest (including tax-exempt interest and partially tax-exempt 
interest), as described in Sec. 1.61-7. Interest shall be adjusted for 
amortization of premium and accrual of discount in accordance with the 
rules prescribed in section 822(d)(2) and the regulations thereunder.
    (ii) Dividends, as described in Sec. 1.61-9.
    (iii) Rents and royalties, as described in Sec. 1.61-8.
    (iv) The entering into of any lease, mortgage, or other instrument 
or agreement from which the company may derive interest, rents, or 
royalties.
    (v) The alteration or termination of any instrument or agreement 
described in subdivision (iv) of this subparagraph.
    (2) The gross income from any trade or business (other than an 
insurance business) carried on by the company or association, or by a 
partnership of which the company or association is a partner.
    (3) Premiums (including deposits and assessments).
    (b) Taxable years beginning after December 31, 1954, and before 
January 1, 1963. An insurance company or association described in 
section 501(c)(15) and paragraph (a) of this section is exempt under 
section 501(a) if the gross amount received during the taxable year from 
the sum of the items described in paragraph (a) (1), (2), and (3) of 
this section does not exceed $75,000.
    (c) No double inclusion of income. In computing the gross income 
from any trade or business (other than an insurance business) carried on 
by the company or association, or by a partnership of which the company 
or association is a partner, any item described in section 822(b)(1) 
(A), (B), or (C) and paragraph (a)(1) of this section shall not be 
considered as gross income arising from the conduct of such trade or 
business, but shall be taken into account under section 822(b)(1) (A), 
(B), or (C) and paragraph (a)(1) of this section.
    (d) Taxable years beginning after December 31, 1953, and before 
January 1, 1955. An insurance company or association described in 
section 501(c)(15) is exempt under section 501(a) if it is a mutual 
company or association (other than life or marine) or if it is a mutual 
interinsurer or reciprocal underwriter (other than life or marine) and 
if the gross amount received during the taxable year from the sum of the 
following items does not exceed $75,000:
    (1) The gross amount of income during the taxable year from--
    (i) Interest (including tax-exempt interest and partially tax-exempt 
interest), as described in Sec. 1.61-7. Interest shall be adjusted for 
amortization of premium and accrual of discount in accordance with the 
rules prescribed in section 822(d)(2) and Sec. 1.822-3.
    (ii) Dividends, as described in Sec. 1.61-9.
    (iii) Rents (but excluding royalties), as described in Sec. 1.61-8.
    (2) Premiums (including deposits and assessments).
    (e) Exclusion of capital gains. Gains from sales or exchanges of 
capital assets to the extent provided in subchapter P (section 1201 and 
following, relating to capital gains and losses), chapter 1 of the Code, 
shall be excluded from the amounts described in this section.

[T.D. 6662, 28 FR 6972, July 29, 1963]

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