St. Louis Bank for Cooperatives v. United States

This federal income tax refund case comes before the court on both parties’ exceptions to the recommended decision of Trial Judge Harkins filed on August 8,1979.

The plaintiff is a nonexempt cooperative corporation. The questions are whether three items of the plaintiffs income for 1972 and 1973 were patronage sourced income under section 13820?) of the Internal Revenue Code of 1954 and therefore deductible from the plaintiffs gross income. These items are: (1) interest received on demand deposits in Farm Credit Banks or on loans to brokerage firms; (2) interest received on federal bonds the…