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the year, the taxpayer received dividends from the glue
manufacturer which it included in its net earnings as
patronage income. See id. In holding that the dividends
were patronage income, the court stated:
Glue is essential to the manufacture of ply-
wood, and the arrangement which [the taxpayer-
cooperative] made to produce its glue through a
supplier which it and another plywood workers'
cooperative organized is reasonably related to
the business done with or for its patrons.
[Id.]
Cf. Rev. Rul. 74-160, supra (interest paid on loans made
by taxpayer cooperative to its chief supplier held to be
patronage income).
Similarly, in Land O'Lakes, Inc. v. United States,
675 F.2d 988 (8th Cir. 1981), the court considered the
patronage classification of dividends received by the
taxpayer, a nonexempt cooperative, with respect to its
stock in a bank for cooperatives. The court noted that
the taxpayer was required to acquire and hold the stock to
obtain a loan, the proceeds of which were used to finance
cooperative activities on favorable terms. See id. at 993.
The court found that the subject transaction in which the
taxpayer received the dividends was not “significantly
distinguishable” from the transactions involved in Rev.
Rul. 69-576, supra, and Rev. Rul. 74-160, supra, and held
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