Carpenter v. Commissioner
United States Tax Court
1. Income -- Cooperative -- Revolving Fund Certificates. -- Amounts retained at sole discretion of board of directors for capital purposes evidenced by revolving fund certificates issued to members in payment of patronage dividends, which certificates bore no interest, were retirable at sole discretion of the directors, were subordinate to all other debts of the cooperative, and had no fair market value held, not to be income of members in year issued. 2. Income -- Year in…
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1. Income -- Cooperative -- Revolving Fund Certificates. -- Amounts retained at sole discretion of board of directors for capital purposes evidenced by revolving fund certificates issued to members in payment of patronage dividends, which certificates bore no interest, were retirable at sole discretion of the directors, were subordinate to all other debts of the cooperative, and had no fair market value held, not to be income of members in year issued. 2. Income -- Year in Which Taxable. -- Stock in another corporation purchased by a cooperative on behalf of its members out of earnings of the…
1Opinion of the Court
OPINION.
Tietjens, Judge:
The Commissioner insists that the revolving fund certificates should be taxable at their face amount regardless of whether or not they had any fair market value at the time of their issuance. He argues that' the Cooperative was under an obligation to distribute patronage dividends either in cash or certificates; that the petitioner by becoming a member voluntarily assented to this arrangement and pursuant thereto, when the directors determined to pay such dividends in certificates the petitioner should be treated as if he had actually received the dividends in cash and…
2Cases cited5 opinions
- Harbor Plywood Corp. v. CommissionerUnited States Tax Court · 1950
- Scientific Instrument Co. v. CommissionerUnited States Tax Court · 1952
- Marsh v. CommissionerUnited States Tax Court · 1949
- Caswell v. CommissionerUnited States Tax Court · 1952
- Phillips v. CommissionerUnited States Tax Court · 1951
3Cited by20 opinions
- Union Equity Cooperative Exchange v. CommissionerUnited States Tax Court · 1972
- Long Poultry Farms, Incorporated v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1957
- Anthony Theophilos Patricia A. Theophilos v. Commissioner Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1996
- Riverfront Groves, Inc. v. CommissionerUnited States Tax Court · 1973
- Lake Region Packing Association v. FurzeSupreme Court of Florida · 1976
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