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Respondent distinguishes the cases on which petitioner
relies and argues that United States v. Cambridge Loan & Bldg.
Co., 278 U.S. 55 (1928), is most directly on point. While the
Federal statutes at issue in Staunton and Mutual provided a
definition for “bank”, the statutes in Cambridge and Perpetual
Bldg. & Loan Association of Columbia v. Commissioner, 34 T.C. 694
(1960), affd. sub nom. Estate of Cooper v. Commissioner, 291 F.2d
831 (4th Cir. 1961), dealt with a statute that did not define the
term “building and loan association”.
In Cambridge, the taxpayer was incorporated in Ohio and was
recognized and conducted its business as a building and loan
association in accordance with the laws of the State of Ohio.
The Revenue Act of 1918, ch. 18, sec. 231, 40 Stat. 1076, and the
Revenue Act of 1921, ch. 136, sec. 231, 42 Stat. 253, provided an
exemption from income tax for building and loan associations but
did not further define such an entity. The U.S. Supreme Court
accepted the State’s classification of a building and loan
association in the absence of a definition in the Federal
statute, provided that there had not been a “gross misuse of the
name”. United States v. Cambridge Loan & Bldg. Co., supra at 59.
Respondent also relies on Perpetual Bldg. & Loan Association of
Columbia v. Commissioner, supra, in which we stated that, for a
building and loan association to qualify for exemption under
section 101(4), I.R.C. 1939, the association must first come
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