Southwest Tex. Elec. Coop. v. Commissioner
United States Tax Court
P, a nonprofit rural electric cooperative, is generally exempt from Federal income tax under sec. 501(a), I.R.C. P borrowed funds to replace funds that it had spent in its exempt activities. Immediately after receiving the borrowed funds, P invested them in two United States Treasury Notes that paid interest during the years in issue. Held: The interest is unrelated debt-financed income under sec. 514, I.R.C., that is subject to Federal income tax under sec. 511, I.R.C.
1Opinion of the Court
SOUTHWEST TEXAS ELECTRIC COOPERATIVE, INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Southwest Tex. Elec. Coop. v. Commissioner
Docket No. 9635-93
United States Tax Court
T.C. Memo 1994-363; 1994 Tax Ct. Memo LEXIS 370; 68 T.C.M. (CCH) 285;
August 1, 1994, Filed
Decision will be entered for respondent.
P, a nonprofit rural electric cooperative, is generally exempt from Federal income tax under sec. 501(a), I.R.C. P borrowed funds to replace funds that it had spent in its exempt activities. Immediately after receiving the borrowed funds, P invested them in two United States Treasury…
2Cases cited8 opinions
- Jarvis v. CommissionerUnited States Tax Court · 1982
- Portland Golf Club v. CommissionerSupreme Court of the United States · 1990
- Frederick v. CommissionerUnited States Tax Court · 1993
- Kern County Electrical Pension Fund v. CommissionerUnited States Tax Court · 1991
- Elliot Knitwear Profit Sharing Plan v. CommissionerCourt of Appeals for the Third Circuit · 1980
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