Anamosa Farmers Creamery Co. v. Commissioner

Board of Tax Appeals

Anamosa Farmers Creamery Co. v. Commissioner

13 B.T.A. 907, 1928 BTA LEXIS 3158

CourtUnited States Board of Tax Appeals

DecidedOctober 10, 1928

DocketDocket No. 29352.

StatusPublished

Cited by3 cases

This text of 13 B.T.A. 907 (Anamosa Farmers Creamery Co. v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Anamosa Farmers Creamery Co. v. Commissioner, 13 B.T.A. 907, 1928 BTA LEXIS 3158 (bta 1928).

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Opinion

[908]*908OPINION.

Lansdon:

The petitioner is what is generally known as a share capital cooperative association. From the evidence we conclude that the situation here is on all fours with that which we have previously considered in proceedings involving the taxability of the receipts of cooperative business organizations. After the payment of operating expenses and of an 8 per cent dividend on outstanding stock, in conformity with its by-laws, it credited the remainder of its receipts for the taxable year to its patrons in proportion to their deliveries of butter fat.

This procedure was in recognition of a liability created by the bylaws which are a contract between such a corporation and its patrons. In this situation neither the basis of accounting nor the fact that no cash was paid to the patrons in the taxable year is material. At December 31, 1925, the amount of $4,784.13 was a liability of the petitioner as additional cost of butter fat purchased from its patrons and should not be included in its taxable income for such year. Trego County Cooperative Association, 6 B. T. A. 1275; Home Builders Shipping Association, 8 B. T. A. 903.

Decision will he entered for the petitioner.

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[908]*908OPINION.

Lansdon:

The petitioner is what is generally known as a share capital cooperative association. From the evidence we conclude that the situation here is on all fours with that which we have previously considered in proceedings involving the taxability of the receipts of cooperative business organizations. After the payment of operating expenses and of an 8 per cent dividend on outstanding stock, in conformity with its by-laws, it credited the remainder of its receipts for the taxable year to its patrons in proportion to their deliveries of butter fat.

This procedure was in recognition of a liability created by the bylaws which are a contract between such a corporation and its patrons. In this situation neither the basis of accounting nor the fact that no cash was paid to the patrons in the taxable year is material. At December 31, 1925, the amount of $4,784.13 was a liability of the petitioner as additional cost of butter fat purchased from its patrons and should not be included in its taxable income for such year. Trego County Cooperative Association, 6 B. T. A. 1275; Home Builders Shipping Association, 8 B. T. A. 903.

Decision will he entered for the petitioner.

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13 B.T.A. 907, 1928 BTA LEXIS 3158, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anamosa-farmers-creamery-co-v-commissioner-bta-1928.

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