Southwest Hardware Co. v. Commissioner
United States Tax Court
Petitioner, organized in 1912 under the general corporation law of California, always has carried on its business as a co-operative wholesale dealer in hardware selling only to its stockholder-members who own equal amounts of stock. No dividends have ever been paid on petitioner's stock.
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Petitioner, organized in 1912 under the general corporation law of California, always has carried on its business as a co-operative wholesale dealer in hardware selling only to its stockholder-members who own equal amounts of stock. No dividends have ever been paid on petitioner's stock. It was understood and agreed between petitioner and each prospective stockholder at the time stock was purchased that all of petitioner's annual net earnings would be distributed to the stockholder-members in proportion to the purchases of each. In each year, patronage refunds were paid to the members in…
1Opinion of the Court
OPINION.
HaReon, Judge:
Petitioner is a corporation organized for profit and it does not claim that it is a tax-exempt corporation under section 101 of the 1939 Code. It contends, however, that it is entitled to exclude from its gross income, the earnings upon business done with its members which were credited each year to the members, and were distributed by means of certificates, the 2 per cent receipts.
The only issue to be decided is whether petitioner received, in each taxable year, the earnings in question under an existing contractual obligation to make refunds of them to its members, and…
2Cases cited3 opinions
- Colony Farms Cooperative Dairy, Inc. v. CommissionerUnited States Tax Court · 1951
- American Box Shook Export Ass'n v. Commissioner of IRCourt of Appeals for the Ninth Circuit · 1946
- American Box Shook Export Asso. v. CommissionerUnited States Tax Court · 1945
3Cited by14 opinions
- Union Equity Cooperative Exchange v. CommissionerUnited States Tax Court · 1972
- Pomeroy Coop. Grain Co. v. CommissionerUnited States Tax Court · 1958
- United States v. Mississippi Chemical CompanyCourt of Appeals for the Fifth Circuit · 1964
- Consumers Credit Rural Electric Cooperative Corp. v. CommissionerUnited States Tax Court · 1961
- Mississippi Chemical Corp. v. United StatesDistrict Court, S.D. Mississippi · 1961
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