Kingfisher Cooperative Elevator Asso. v. Commissioner
United States Tax Court
Petitioner, a local farmers' cooperative, included patronage dividends received from regional cooperatives of which it was a member in its gross income in the year of receipt. In computing its patronage dividends for its member-patrons for fiscal year 1981, petitioner allocated net income to its patrons according to their patronage during that year. Petitioner's allocation was adopted by its board of directors and ratified annually by its members.
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Petitioner, a local farmers' cooperative, included patronage dividends received from regional cooperatives of which it was a member in its gross income in the year of receipt. In computing its patronage dividends for its member-patrons for fiscal year 1981, petitioner allocated net income to its patrons according to their patronage during that year. Petitioner's allocation was adopted by its board of directors and ratified annually by its members. Held, petitioner's allocation method was equitable considering the stability of its membership, the practicalities of the allocation, and the…
1Opinion of the Court
Cohen, Judge:
Respondent determined a deficiency of $59,724.97 in petitioner’s Federal income tax for the taxable year ended March 31, 1981, based on disallowance of part of the patronage dividend deduction1 claimed by petitioner, a farmers’ cooperative subject to the provisions of subchapter T (secs. 1381 through 1388).2 The issue to be decided is the equitability of petitioner’s allocation to its members of patronage dividends received from regional cooperatives according to its members’ patronage in the year of receipt. Because "equita-bility” is the principle to be applied, our findings…
2Cases cited10 opinions
- 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
- United Grocers, Ltd. v. United StatesCourt of Appeals for the Ninth Circuit · 1962
- United Grocers, Ltd. v. United StatesDistrict Court, N.D. California · 1960
- Farmers Union Co-Op. Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1937
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3Cited by1 opinion
- Kingfisher Cooperative Elevator Asso. v. CommissionerUnited States Tax Court · 1985