Lamesa Cooperative Gin v. Commissioner
United States Tax Court
1. Petitioner, an exempt farmers' cooperative, sold in taxable year 1974 equipment on which it had deducted depreciation in prior years. All the gain from the sale of the equipment was reported on petitioner's taxable year 1974 return as ordinary income under sec. 1245, I.R.C. 1954. In determining the amount to be paid as patronage dividends, petitioner allocated all this gain to its taxable year 1974 patrons in proportion to their patronage during that year.
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1. Petitioner, an exempt farmers' cooperative, sold in taxable year 1974 equipment on which it had deducted depreciation in prior years. All the gain from the sale of the equipment was reported on petitioner's taxable year 1974 return as ordinary income under sec. 1245, I.R.C. 1954. In determining the amount to be paid as patronage dividends, petitioner allocated all this gain to its taxable year 1974 patrons in proportion to their patronage during that year. Held, under sec. 1382(b), I.R.C. 1954, petitioner was entitled to exclude in computing taxable income the entire amount of the gain…
1Opinion of the Court
Whitaker, Judge:*
The Commissioner determined a deficiency in the Federal income tax of petitioner for the taxable year ending July 31, 1974, in the amount of $21,232.11. The issues to be decided are: (1) Whether part of the patronage dividend deduction1 claimed by petitioner, an exempt cooperative, should be disallowed on the ground that gain from the sale of equipment in taxable year 1974 was not properly allocated among current and former patrons, and (2) whether the patronage dividend deduction should be disallowed to the extent allocable to petitioner’s purchasing function.
FINDINGS OF FACT
2Cases cited17 opinions
- Burnet v. HoustonSupreme Court of the United States · 1931
- United States v. KalesSupreme Court of the United States · 1941
- Union Equity Cooperative Exchange v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1973
- Union Equity Cooperative Exchange v. CommissionerUnited States Tax Court · 1972
- Pomeroy Coop. Grain Co. v. CommissionerUnited States Tax Court · 1958
12 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- Kingfisher Cooperative Elevator Asso. v. CommissionerUnited States Tax Court · 1985
- Kingfisher Cooperative Elevator Asso. v. CommissionerUnited States Tax Court · 1985
- Lamesa Cooperative Gin v. CommissionerUnited States Tax Court · 1982