Over the past year, we have been posting on the tax bill passed on December 22, 2017, as Public Law 115-97 (the “Original Act”). The Original Act substantially amended the Internal Revenue Code including provisions that directly impact cooperatives. Prior …
Cooperative Taxation
Tax Reform Act Impacts Cooperatives, Part IV: Impact on Governmental Grants
Perhaps the most impactful aspect of the recent tax reform law is the change to the treatment of governmental grants. Many cooperatives qualify for governmental grants in furtherance of their community benefits, such as electric, telephone, and broadband service and …
Tax Reform Act Impacts Cooperatives, Part III: Executive Compensation
Part III of the series on the impact of tax reform on cooperatives continues the prior part’s focus on tax-exempt organizations, including Section 501(c)(12) electric, telephone, and telecommunications cooperatives. This part discusses a tax imposed on excess executive compensation.
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Tax Reform Act Impacts Cooperatives, Part II: UBIT Changes
Part II of the series on the impact of tax reform on cooperatives discusses the changes to Unrelated Business Income Tax (“UBIT”). Whereas Part I primarily focused on taxable cooperatives and new Section 199A, this part focuses on tax-exempt …
Tax Reform Act Impacts Cooperatives: New Section 199A
On December 22, 2017, Congress’ new tax reform bill became law as Public Law 115-97 (the “Act”). The Act substantially amends the Internal Revenue Code including provisions that directly impact cooperatives. This post is the first in a series that …
Patronage Determinations: Patronage-Sourced Income and Expenses
Taxable cooperatives – including Subchapter T cooperatives and taxable rural telephone and electric cooperatives – must determine whether income and expenses are considered patronage-sourced or not. This is called patronage determination. It is critical to taxable cooperatives because it determines …
Cooperative-Subsidiary Consolidation Issues
Many cooperatives provide a range of services to their members. Sometimes these services are provided through subsidiaries. Each cooperative must choose the right mix of services to provide and customers to serve, along with the best corporate structure to provide …
AHC Attorney David Cook Presents on Capital Credits and Cooperative Tax
AHC attorney David Cook will present at the National Telecommunications Cooperative Association’s Finance and Accounting Conference concerning two important topics for telecommunications and telephone cooperatives. He will discuss “Strategies for Managing Capital Credits” and “Handling Large Gains and Losses.” Here …
IRS Approves Patrons’ “Written Consent” by Website
In a prior Cooperative Tax Post, we discussed the Service’s trend of permitting cooperatives to satisfy notification requirements of Subchapter T by modern transmission methods. In this recent private letter ruling, the Service permitted a cooperative to obtain patrons’ …
Op-ed: Should public utility commissions regulate cooperatives?
Dan Nemes of MN350 (an organization addressing the global climate crisis), offers this op-ed in the 6 February issue of Rochester, Minnesota’s Post-Bulletin, opposing the Minnesota Legislature’s recently proposed legislation that he believes will negatively impact the state’s renewable energy …