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members. Since 1937, petitioner has so treated the transfer fees
received. The transfer fees received by petitioner in 1988 and
1989 were the only amounts reflected in the Statements of
Consolidated Member's Equity in petitioner’s financial statements
as capital contributions of new members. The amount of capital
contributions of new members reflected on the 1990 financial
statements is the sum of the amount of transfer fees received in
1990 and the amounts received by petitioner on sales of new
participation interests to members in 1990.5 Petitioner showed,
on Schedule L of Form 1120, U.S. Corporation Income Tax Return,
all transfer fees collected during the taxable years 1988 through
1990 as contributions to capital.
A member who wishes to sell a membership submits to
petitioner an offer to sell, which includes an offer price.
Petitioner posts all offers to sell and bids to purchase on the
bulletin board of the CBOT. A sale is effected when there is a
match between an offer and a bid.
Petitioner’s Member Services Department collects the
transfer fees in connection with the transfers of memberships.
5 Petitioner collected $345,050 in transfer fees in 1990.
The capital contributions received from new members during 1990
was $474,364; the balance of $129,314 was the proceeds of sales
of new memberships received by petitioner in 1990. The parties’
supplemental stipulation of facts states that transfer fees
received by petitioner in 1988 and 1989 were the only capital
contributions made in those years, notwithstanding that there
were increases in the number of memberships in those years, as
well as in 1990.
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