- 27 - fees, although earmarked for capital expenditures, could not be treated as capital contributions because the members had no equity interest in the club and received no legal entitlement for the payment of the fees other than access to the club and the right to vote for the board of directors. The court commented that the earmarking of the payments for capital expenditures was relevant and pertinent, but not determinative of, a contribution to capital. Id at 675. In Affiliated Government Employees Distrib. Co. v. Commissioner, 37 T.C. 909 (1962), affd. 322 F.2d 872 (9th Cir. 1963), we addressed whether membership fees paid to the taxpayer, a nonstock membership corporation operating department stores for the exclusive use of its members and their guests, were contributions to capital. We held that the fees were payments for the privilege of shopping at the taxpayer’s stores and were not contributions to capital because the members were not entitled to share in the profits of the enterprise and had no assurance of a share in the dissolution proceeds because the memberships were nonassignable and terminated at death. Id. at 918. In Oakland Hills Country Club v. Commissioner, 74 T.C. 35 (1980), we denied a country club's motion for summary judgment, holding that a "proprietary interest" is not sufficient to turn a membership fee into a capital contribution. However, the membersPage: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
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