(a) Imposition of tax.— When filing his/her income tax return, the taxpayer may elect to treat the amount of the lump sum includible in the gross income as a long-term capital gain.(b) Definitions.—(1) Lump sum.— For the sole purposes of this section, the term 'lump sum' means amounts payable during the same taxable year under a variable annuity contract issued by an eligible insurance company.(2) Eligible insurance company.— For the sole purposes of this section, the term 'eligible insurance company' means an insurance company organized under the laws of the Government of Puerto Rico and authorized as such by the Insurance Commissioner of Puerto Rico, or a foreign insurance company duly authorized to conduct insurance business by the Insurance Commissioner of Puerto Rico, when not less than eighty percent (80%) of its gross income derived during the period of three (3) taxable years ending at the close of the taxable year prior to the date of payment of the annuity or eligible periodic payment that constitutes income that is actually related to the operation of a trade or business in Puerto Rico.(3) Variable annuity contract.— For the sole purposes of this section, the term

eriodic payment that constitutes income that is actually related to the operation of a trade or business in Puerto Rico.(3) Variable annuity contract.— For the sole purposes of this section, the term 'variable annuity contract' means an annuity insurance contract or an endowment insurance contract, the funds of which were deposited in separate accounts subject to the special additional imposed under § 30081 of this title. History —Jan. 31, 2011, No. 1, § 1023.08, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 16.