Description: Interplay of §807(f) and the stat cap in §807(d) as there continues to be uncertainty as to whether a change to the stat reserve could be subject to §807(f).

Description: This article summarizes the treatment of changes in the basis for determining life insurance tax reserves under prior law and describes the changes enacted by the Tax Cuts and Jobs Act. It further explains the procedures for changing the basis of computing reserves under the new rules as outlined in Revenue Procedure 2019-10, the IRS’s December 2018 guidance on the subject, and discusses the uncertainties that remain.