TRANSFERS OF INSTALLMENT OBLIGATIONS TO CONTROLLED INSURANCE COMPANIES.

SEC. 27. TRANSFERS OF INSTALLMENT OBLIGATIONS TO CONTROLLED INSURANCE COMPANIES. (a) Effect of Transfer.— Section 453 (d) (relating to gain or loss on disposition of installment obligations) is amended by adding at the end thereof the following new paragraph: “(5) Life insurance companies.—In the case of a disposition of an installment obligation by any person other than a life insurance company (as defined in section 801 (a)) to such an insurance company or to a partnership of which such an insurance company is a partner, no provision of this subtitle providing for the nonrecognition of gain shall apply with respect to any gain resulting under paragraph (1). If a corporation which is a life insurance company for the taxable year was (for the preceding taxable year) a corporation which was not a life insurance company, such corporation shall, for purposes of this paragraph and paragraph (1), be treated as having transferred to a life insurance company, on the last day of the preceding taxable year, all installment obligations which it held on such last day. A partnership of which a life insurance company becomes a partner shall, for purposes of this paragraph and paragraph (1), be treated as having transferred to a life insurance company, on the last day of the preceding taxable year of such partnership, all installment obligations which it holds at the time such insurance company becomes a partner.” (b) Effective Date.—The amendment made by subsection (a) shall apply to taxable years ending after December 31, 1957, but only as to transfers or other dispositions of installment obligations occurring after such date.