### Question
How is the term losses incurred defined?


### Answer
The term **losses incurred** is defined in *26 U.S.C. § 832* as the following:

> losses incurred during the taxable year on insurance contracts computed as follows:


(i) To losses paid during the taxable year, deduct salvage and reinsurance recovered during the taxable year

#### 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**

