Fountain City Cooperative Creamery Asso. v. Commissioner
United States Tax Court
A Wisconsin corporation organized in 1900 under a statute providing for cooperative corporations had paid no patrons' dividend up to 1943. In that year it created a reserve called "Patrons Equity Reserve," out of which the directors were authorized to order subsequent patrons' dividends to be paid, provided the funds of the reserve were not needed for other corporation expense.
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A Wisconsin corporation organized in 1900 under a statute providing for cooperative corporations had paid no patrons' dividend up to 1943. In that year it created a reserve called "Patrons Equity Reserve," out of which the directors were authorized to order subsequent patrons' dividends to be paid, provided the funds of the reserve were not needed for other corporation expense. Held, the amount set aside for said reserve is neither deductible nor excludible from income to determine net taxable income.
1Opinion of the Court
Fountain City Cooperative Creamery Association, Petitioner, v. Commissioner of Internal Revenue, Respondent
Fountain City Cooperative Creamery Asso. v. Commissioner
Docket No. 10969
United States Tax Court
9 T.C. 1077; 1947 U.S. Tax Ct. LEXIS 17;
December 8, 1947, Promulgated
Decision will be entered under Rule 50.
A Wisconsin corporation organized in 1900 under a statute providing for cooperative corporations had paid no patrons' dividend up to 1943. In that year it created a reserve called "Patrons Equity Reserve," out of which the directors were authorized to order subsequent patrons' dividends…
2Cases cited2 opinions
- Fountain City Cooperative Creamery Asso. v. CommissionerUnited States Tax Court · 1947
- Pearson v. Clam Falls Cooperative Dairy Ass'nWisconsin Supreme Court · 1943