- 19 - incorporated non-stock social club to repair and improve the club's building held to be capital contributions even though the club's principal business was providing services to its members); Lake Forest, Inc. v. Commissioner, T.C. Memo. 1963-39 (payments by members to a cooperative housing corporation to meet mortgage amortization obligations were held to be capital contributions even though members also leased property from the corporation). Because petitioner's members have a dual role as users of the CBOT services and facilities and holders of equity interests in the CBOT, we must determine whether the payments were made in consideration of the receipt of goods or services from petitioner or as an investment in the capital of the corporation. Respondent argues that the transfer fees are payments in consideration of obtaining access to the trading facilities and thus are ordinary income. We disagree. Petitioner charges its members a separate transaction fee for each trade executed on the exchange. A transaction fee is paid in consideration of the use of the trading facilities every time a trade is executed. The transaction fees amounted to more than $40 million in each of the 3 years in issue and are petitioner’s primary source of revenue. We are not persuaded that the transfer fees, amounting to less than 1 percent of the transaction fees charged for actual use of the trading facilities, are payments in consideration of the usePage: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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