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performed for a full membership transferee who paid $1,000.
Petitioner, in some instances, assesses the same fees despite
substantial differences in the amounts of services. For
instance, the transfer fee for an intrafamily transfer of a full
membership, which requires few of the services listed, is
normally $1,000, the same transfer fee payable in connection with
an outright sale of a full membership, which requires the entire
range of services.
In contrast to the transfer fees, the application fees paid
in connection with applications for CBOT memberships are directly
related to the services performed in connection with the
applications. Short-form applications, which obviously require
fewer services, require a lower fee than full applications. The
application fees are based on the services rendered and, as such,
are treated as ordinary income. On the other hand, the transfer
fees are not based on the functions performed. Rather, the
transfer functions are performed incidentally to the paying of
the transfer fee. The lack of correlation between the different
transfer fees and the functions performed by the Member Services
Department supports the conclusion that the transfer fees are not
payments for or in consideration of these services.
The parties agree that the payor’s motive controls whether a
payment is a contribution to capital, whether the payor is a
nonshareholder, see United States v. Chicago, B & Q. R.R., 412
U.S. 401, 411-413 (1973); Brown Shoe Co. v. Commissioner, 339
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