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were nontaxable contributions to capital because they were
provided for in the leases and used for capital purposes.
In Cambridge Apartment Bldg. Corp. v. Commissioner, 44
B.T.A. 617 (1941), the Commissioner determined deficiencies
against a cooperative housing corporation on the ground that
assessments collected from the tenant-shareholders for the
ostensible purpose of retiring bonded indebtedness were income to
the corporation. The taxpayer used most of the funds for
operating expenses, but used any excess funds to retire its
bonds. The Board, relying on 874 Park Ave., held that the excess
of assessments used to retire bonds were nontaxable contributions
to capital, notwithstanding the lack of an explicit agreement
between the corporation and the shareholders or any requirement
that the corporation use the excess funds to retire the bonds.
Our most recent opinion on the housing coop capital
contribution issue, Concord Village, Inc. v. Commissioner, 65
T.C. 142 (1975), is instructive. The taxpayer was a nonstock
not-for-profit housing corporation operated for the benefit of
its members, who had proprietary interests. However, upon the
sale of their interests, members were required under the
taxpayer’s bylaws to forfeit to the corporation the part of the
sale price that exceeded the FHA transfer value. We held that
the forfeitures were taxable gain to the taxpayer, but that all
proceeds of assessments accumulated in the taxpayer’s replacement
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