### Question
How does Insurance Companies define gross income?


### Answer
Under *26 U.S.C. § 832*, **gross income** is defined as:

> the sum of—


(A) the combined gross amount earned during the taxable year, from investment income and from underwriting income as provided in this subsection, computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Association of Insurance Commissioners,


(B) gain during the taxable year from the sale or other disposition of property,


(C) all other items constituting gross income under subchapter B, except that, in the case of a mutual fire insurance company exclusively issuing perpetual policies, the amount of single deposit premiums paid to such company shall not be included in gross income,


(D) in the case of a mutual fire or flood insurance company whose principal business is the issuance of policies—


(i) for which the premium deposits are the same (regardless of the length of the term for which the policies are written), and


(ii) under which the unabsorbed portion of such premium deposits not required for losses, expenses, or establishment of reserves is returned or credited to the policyholder on cancellation or expiration of the policy,


  

an amount equal to 2 percent of the premiums earned on insurance contracts during the taxable year with respect to such policies after deduction of premium deposits returned or credited during the same taxable year, and


(E) in the case of a company which writes mortgage guaranty insurance, the amount required by subsection (e)(5) to be subtracted from the mortgage guaranty account

#### Citation:
  - *26 U.S.C. § 832*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter L-Insurance Companies > PART II-OTHER INSURANCE COMPANIES**

