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operation of each of the three corporations facilitated
petitioner’s cooperative enterprise. In our view,
petitioner’s acquisition of the stock of Terra, Seaway, and
Mex-Am was no more an investment than the taxpayer’s
acquisition of the stock from which the taxpayer received
dividends in Linnton Plywood Association v. United States,
410 F. Supp. 1100 (D. Or. 1976), a case that respondent
relies upon here, no more of an investment than the stock
of the bank for cooperatives that was involved in Land
O’Lakes v. United States, 675 F.2d 988 (8th Cir. 1982), and
no more of an investment than the stock of the DISC that
was involved in Rev. Rul. 75-228, 1975-1 C.B. 278. The
issue in those cases was whether dividends paid on the
stock should be classified as patronage income. The issue
here is whether income from the sale of such stock should
be classified as patronage from patronage sources.
Sale of Terra Stock
Petitioner formed Terra to explore for and produce
crude oil and natural gas for petitioner’s refineries which
used the crude oil to produce petroleum products that were
sold to petitioner’s patrons. Petitioner sold its stock in
Terra during a time of financial distress to raise cash
necessary to reduce its debt load and restore its financial
stability. At the time it sold its stock in Terra,
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