The Board of Trade of the City of Chicago and Subsidiaries - Page 2

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               George B. Javaras, Barbara M. Angus, Richard E. Peterson,              
          and Raymond P. Wexler for petitioner.                                       
               Joseph T. Ferrick, for respondent.                                     


               BEGHE, Judge:  Respondent determined deficiencies in                   
          petitioner's Federal income tax for the years 1988, 1989, and               
          1990 in the amounts of $108,859, $113,473, and $65,051,                     
          respectively.                                                               
               The deficiencies arise from respondent’s inclusion in                  
          petitioner’s gross income of membership transfer fees.  The sole            
          issue is whether the membership transfer fees paid to petitioner            
          during 1988, 1989, and 1990 are contributions to capital or                 
          payments for services.  We hold the transfer fees to be excluded            
          from gross income as contributions to capital.                              
                                  FINDINGS OF FACT                                    
               The parties have stipulated some facts, and the stipulation            
          of facts and the attached exhibits are incorporated in this                 
          opinion.  At all relevant times, petitioner maintained its                  
          principal place of business in Chicago, Illinois.                           
               Petitioner, the Board of Trade of the City of Chicago                  
          (commonly referred to as the CBOT), is a taxable membership                 
          corporation organized in 1859 under a special act of the Illinois           






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