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We must, therefore, consider whether petitioner’s status as
a cooperative requires a different result.
3. Cooperative Status
a. Introduction
Section 1382 addresses the taxable income of cooperatives,
such as petitioner, to which section 1381 applies (individually,
a subchapter T cooperative). Section 1382(a) addresses the gross
income of subchapter T cooperatives. In pertinent part, it
provides:
SEC. 1382(a). Gross Income.–-Except as provided
in subsection (b), the gross income of any organization
to which this part applies shall be determined without
any adjustment (as a reduction in gross receipts, an
increase in cost of goods sold, or otherwise) by reason
of any allocation or distribution to a patron out of
the net earnings of such organization * * * .
Subsection (b)(1) of section 1382 provides an exception that, in
effect, allows a deduction from gross income for the payment of
“patronage dividends”. That term, in pertinent part, is defined
in section 1388(a) to mean amounts paid by a subchapter T
cooperative:
(1) on the basis of quantity or value of business
done with or for such patron,
(2) under an obligation of such organization to
pay such amount, which obligation existed before the
organization received the amount so paid, and
(3) which is determined by reference to the net
earnings of the organization from business done with or
for its patrons.
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