Chicago Mercantile Exchange - Page 2




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          204(a)(7) of the Tax Reform Act of 1986 (TRA), Pub. L. 99-514,              
          100 Stat. 2146.  We hold it is not.  Unless otherwise indicated,            
          section references are to the Internal Revenue Code in effect for           
          the subject years.  Rule references are to the Tax Court Rules of           
          Practice and Procedure.                                                     
                                     Background                                       
               All facts were stipulated and are so found.  The                       
          stipulations of facts and the exhibits submitted therewith are              
          incorporated herein by this reference.  Petitioner is a                     
          corporation organized under the Illinois General Not for Profit             
          Corporation Act to operate a commodity exchange in Chicago,                 
          Illinois.  Its principal place of business is in Chicago, and it            
          did not own any stock in a corporation during the relevant years.           
               Petitioner primarily provides and regulates a commodity                
          exchange where futures contracts and options on futures contracts           
          are traded.  Petitioner also establishes and enforces trading               
          rules, collects and disseminates information about its markets,             
          and provides the clearing mechanism for trades executed on its              
          commodity exchange.  Petitioner has no shareholders but is owned            
          by its approximately 2,700 members, approximately 1/4 of which              
          are corporations and the remainder of whom are individuals.  Its            
          member’s customers who have futures contracts and options traded            
          on its commodity exchange are located worldwide, and it receives            
          a significant portion of its income from foreign subscribers.               






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