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
OPINION.
Harlan, Judge:
This proceeding involves deficiencies in income and declared value excess profits taxes for the calendar year 1943 as follows: Income tax, $1,393.55, and declared value excess profits tax, $142.22; total, $1,535.77.
Petitioner filed with the collector of internal revenue for the district of Wisconsin its corporation income and declared value excess profits tax return, Form 1120, for the calendar year 1943. This return showed total gross income of $63,383.45, total claimed deductions of $62,794.04, including a deduction for “Patrons Equity Reserve” of $5,088.55, and normal…
2Cases cited1 opinion
- Pearson v. Clam Falls Cooperative Dairy Ass'nWisconsin Supreme Court · 1943
3Cited by8 opinions
- Farmers Cooperative Co. v. BirminghamDistrict Court, N.D. Iowa · 1949
- Union Equity Cooperative Exchange v. CommissionerUnited States Tax Court · 1972
- Long Poultry Farms, Incorporated v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1957
- Colony Farms Cooperative Dairy, Inc. v. CommissionerUnited States Tax Court · 1951
- Colony Farms Cooperative Diary, Inc. v. CommissionerUnited States Tax Court · 1951
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