Colony Farms Cooperative Diary, Inc. v. Commissioner
United States Tax Court
The patronage dividends paid by petitioner, a cooperative, to its members in certificates of interest in a fund representing its excess of gross receipts from member products sold over operating expenses and segregated on its books as a "Reserve for Members' Equity," held not to have been paid in the exercise of discretion by its directors but under a fixed and legal obligation under the provisions of its charter, bylaws, and contracts with its members and, as such, subject…
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The patronage dividends paid by petitioner, a cooperative, to its members in certificates of interest in a fund representing its excess of gross receipts from member products sold over operating expenses and segregated on its books as a "Reserve for Members' Equity," held not to have been paid in the exercise of discretion by its directors but under a fixed and legal obligation under the provisions of its charter, bylaws, and contracts with its members and, as such, subject to exclusion in computing its net income subject to tax. United Cooperatives, Inc., 4 T. C. 93, followed.
1Opinion of the Court
Colony Farms Cooperative Dairy, Incorporated, Petitioner, v. Commissioner of Internal Revenue, Respondent
Colony Farms Cooperative Diary, Inc. v. Commissioner
Docket No. 24144
United States Tax Court
17 T.C. 688; 1951 U.S. Tax Ct. LEXIS 55;
October 15, 1951, Promulgated
Decision will be entered under Rule 50.
The patronage dividends paid by petitioner, a cooperative, to its members in certificates of interest in a fund representing its excess of gross receipts from member products sold over operating expenses and segregated on its books as a "Reserve for Members' Equity," held not to have been paid…
2Cases cited5 opinions
- Harbor Plywood Corp. v. CommissionerUnited States Tax Court · 1950
- Peoples Gin Co., Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1941
- FOUNTAIN CITY CO-OP. CR. ASS'N v. Commissioner of Int. Rev.Court of Appeals for the Seventh Circuit · 1949
- Fountain City Cooperative Creamery Asso. v. CommissionerUnited States Tax Court · 1947
- Colony Farms Cooperative Diary, Inc. v. CommissionerUnited States Tax Court · 1951