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interest income as either patronage or nonpatronage-sourced
income has been at issue since the pleadings were filed. A
taxpayer bears the burden of proving allegations it makes in the
petition when it submits a case fully stipulated. Rules 122,
217(c)(1)(A); Kitch v. Commissioner, 104 T.C. 1, 5 (1995). The
stipulation does not include facts that support a finding that
petitioner's interest income was patronage sourced. The record
includes nothing to suggest that petitioner’s interest income was
earned from required reserves or that petitioner maintained its
savings and money market accounts and certificates of deposit for
business, rather than investment, purposes. Petitioner failed to
carry its burden of proving that its interest income was
patronage sourced under section 1388.
We hold that petitioner's interest income is taxable to
petitioner as determined by respondent.
To reflect the foregoing,
Decision will be entered for
respondent.
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