Petaluma Co-operative Creamery v. Commissioner
United States Tax Court
Petitioner is a farmers' cooperative whose activities consist of receiving butterfat from producers and selling milk to principally one nearby dairy. In 1958 and 1959 petitioner transferred amounts from its undistributed income account to its stated capital account. During these same years petitioner made additions to its reserve for bad debts based on anticipated worthlessness of outstanding receivables from its principal customer.
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Petitioner is a farmers' cooperative whose activities consist of receiving butterfat from producers and selling milk to principally one nearby dairy. In 1958 and 1959 petitioner transferred amounts from its undistributed income account to its stated capital account. During these same years petitioner made additions to its reserve for bad debts based on anticipated worthlessness of outstanding receivables from its principal customer. Held, petitioner was not exempt from Federal income taxes during its fiscal years 1958 and 1959. Held, further, the amounts transferred to petitioner's stated…
1Opinion of the Court
OPINION
The issues are (1) whether petitioner operated during its fiscal years 1958 and 1959 as a farmers’ cooperative which was exempt from Federal income taxes; (2) should certain amounts transferred by petitioner in 1958 and 1959 from its undistributed income account to its stated capital be treated as patronage dividends and interest payments; and (8) was petitioner entitled to deductions in 1958 and 1959 for additions to its reserve for bad debts. We must reach issues (2) and (3) only in the event that petitioner was not an exempt cooperative association.
Relying on section 521(b) (2),1…
2Cases cited7 opinions
- Roanoke Vending Exchange, Inc. v. CommissionerUnited States Tax Court · 1963
- Calavo, Inc., and Calavo Growers of California, Successor to Assets and Liabilities of Calavo, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1962
- Co-Operative Grain & Supply Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1969
- Farmers Cooperative Co. v. CommissionerUnited States Tax Court · 1959
- Farmers Cooperative Company v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1961
2 more not listed; retrieve them via the Exa API.
3Cited by6 opinions
- Union Equity Cooperative Exchange v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1973
- Farm Service Cooperative v. Commissioner of Internal Revenue, National Council of Farmer Cooperatives, AmicusCourt of Appeals for the Eighth Circuit · 1980
- Farmers Cooperative Co. v. CommissionerUnited States Tax Court · 1985
- FCX, Inc. v. South Carolina Tax CommissionCourt of Appeals of South Carolina · 1984
- Farmers Cooperative Co. v. CommissionerUnited States Tax Court · 1985
1 more not listed; retrieve them via the Exa API.