A bill to amend the Internal Revenue Code of 1954 to allow a deduction for certain contributions to product liability loss reserve accounts.

Summary

Amends the Internal Revenue Code to allow business enterprises engaged in the manufacture, importation, distribution, lease or sale of any product for which product liability may be incurred an income tax deduction for amounts paid to its product liability loss reserve account and to its captive insurer (wholly or partially-owned by the business). Limits the availability of such deduction to businesses with a severe product liability insurance problem, as defined by this Act. Sets forth a formula for determining the maximum allowable amount of the deduction. Disallows a deduction for product liability losses which do not exceed the sum of the amount in the product liability loss reserve account of the taxpayer at the beginning of the taxable year, plus the total amount of deductible payments to such account. Requires the recapture of amounts deducted if funds from a product liability loss reserve account are used for an unauthorized purpose.

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1 official file

• Introduced in House

  summary · EN · 23 February 1981

  Open at official source

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