Statutory Net Income vs Tax Basis Income

arch1892arch1892
in Odomirok.26-Taxes

It might be a silly question, but when we calculate Statutory Net Income which includes deducting foreign/federal income taxes paid, we are not making any adjustments to losses/EP, Investment Income which is done under TBI right?

If I understand it correctly, the federal income tax portion of Statutory Net Income is = corporate tax * TBI

Comments

  • arch1892arch1892

    I think it's the word 'Net' in Statutory Net Income that's throwing me off. Is the net referring to Net of Taxes or Net of reinsurance?

  • Staff - ACStaff - AC

    Federal income tax equation above is correct.

    "Gross income" would be synonymous with "revenue," i.e. premium. "Net income" is premium net of loss and expense.

  • arch1892arch1892

    Thanks for the clarification. Removes much of the confusion!

  • Staff - ACStaff - AC

    Sure, good luck.

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