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831(b) captive

An 831(b) captive is a captive that takes the 831(b) election and is then taxed under Internal Revenue Code § 831(b).

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Additional Information

This tax election allows a captive qualifying to be taxed as a US insurance company to pay tax on investment income only in any year that its written premium is at or below the threshold for the applicable tax year, which in 2017 was set at $2.2 million or less with the premium cap subject to inflation adjustments. Such captives are also known as "micro-captives."