Certified Grocers of California, Ltd. v. Commissioner
United States Tax Court
P, a nonexempt cooperative, derived certain income from interest on short-term loans which R determined was income from nonpatronage sources within the meaning of subchapter T, I.R.C. 1954. Under the facts, held: That a portion of the interest was patronage-sourced as it was derived from funds held to provide the liquidity necessary to finance P's operations. The remainder of the interest was nonpatronage-sourced.
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P, a nonexempt cooperative, derived certain income from interest on short-term loans which R determined was income from nonpatronage sources within the meaning of subchapter T, I.R.C. 1954. Under the facts, held: That a portion of the interest was patronage-sourced as it was derived from funds held to provide the liquidity necessary to finance P's operations. The remainder of the interest was nonpatronage-sourced. Because of petitioner's failure to report the patronage-sourced interest as income in the first instance, although claiming a patronage deduction with respect thereto, R's…
1Opinion of the Court
OPINION
KÓRNER, Judge:2
Respondent determined deficiencies in Federal income taxes for petitioner and certain consolidated subsidiaries for the 1979, 1980, and 1981 taxable years3 as follows:
Taxable year Deficiency
1979 . $2,042,782
1980 . 1,005,038
1981 . 2,825,142
After concessions, the issues for decision are: (1) Whether interest income earned by petitioner from its surplus cash constituted “patronage-sourced” income within the meaning of subchapter T, to any extent;4 (2) if not, whether petitioner can offset the nonpatronage-sourced interest income with a portion of its patronage-sourced…
2Cases cited10 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Jasionowski v. CommissionerUnited States Tax Court · 1976
- Burnet v. Commonwealth Improvement Co.Supreme Court of the United States · 1932
- Television Industries, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1960
- Associated Milk Producers, Inc. v. CommissionerUnited States Tax Court · 1977
5 more not listed; retrieve them via the Exa API.
3Cited by12 opinions
- Concord Consumers Hous. Coop. v. CommissionerUnited States Tax Court · 1987
- Buckeye Countrymark v. CommissionerUnited States Tax Court · 1994
- CF Indus., Inc. v. CommissionerUnited States Tax Court · 1991
- CF Industries, Inc. v. CommissionerCourt of Appeals for the Seventh Circuit · 1993
- Cf Industries, Inc. v. Commissioner Of Internal RevenueCourt of Appeals for the Seventh Circuit · 1993
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