Capital Credits

AHC Attorney David Cook Addresses NTCA Regarding Cooperative Taxation

by David R. Cook Jr.
July 26, 2013February 15, 2022

AHC attorney David Cook will address the National Telecommunications Cooperative Association concerning recent developments in cooperative taxation. Cooperatives must comply with special tax rules to qualify, or continue to qualify, for tax advantages such as tax exemption or deduction and exemption of patronage earnings. The session will include options for allocation and retirement of capital credits and patronage dividends, along with recent IRS rulings in this area. He also will cover cooperative tax issues arising from consolidated reporting, the formation of subsidiaries, and various corporate transactions, such as liquidations and mergers. Read More »AHC Attorney David Cook Addresses NTCA Regarding Cooperative Taxation

Discounted Capital Credits and the Member Income Test: The Creation of a New Equity Account

by David R. Cook Jr.
March 30, 2013February 15, 2022

Cooperatives have been given conflicting guidance from the IRS concerning the proper treatment of discounting of capital credits. Specifically, some pronouncements indicate that the discount… Read More »Discounted Capital Credits and the Member Income Test: The Creation of a New Equity Account

Guest Post: Enacting a Capital Credits Policy Change

by David R. Cook Jr.
February 11, 2013

This guest post is from CFC’s February 11, 2013 CFC Solutions Newsletter (Vol. 15, No. 6).

FROM THE CFO’S DESK
Enacting a Capital Credits Policy Change
Read More »Guest Post: Enacting a Capital Credits Policy Change

Updated Capital Credits Litigation Summary

by David R. Cook Jr.
October 14, 2012

AHC attorneys have been closely following lawsuits against cooperatives’ capital credit management. We recently developed an updated summary of the cases. Take a moment to review the summary by clicking here.Read More »Updated Capital Credits Litigation Summary

Cooperative Litigation Update: N.C. Court Rules on Coop’s Discounting Program

by David R. Cook Jr.
August 11, 2012February 15, 2022

In another lawsuit concerning cooperatives’ capital credit practices, a North Carolina trial court ruled in favor of a cooperative that we previously wrote about in another blog post.

The court ruled, based on the facts at issue, that the cooperative had no fiduciary duty to the plaintiffs, which were a group of deceased members’ estates. In addition, it declared that the cooperative had authority to adopt a procedure for retiring deceased members’ capital credits on an accelerated and discounted basis. However, it expressly did not rule on whether the cooperative, in practice, properly discounted the capital credits. In other words, the court reserved judgment on the specific manner of discounting the particular capital credits at issue in this case. Read More »Cooperative Litigation Update: N.C. Court Rules on Coop’s Discounting Program

Effectively Managing Capital Credits

by David R. Cook Jr.
June 22, 2012February 15, 2022

AHC attorney David Cook has written an article for The Cooperative Accountant, a journal published by the National Society of Accountants for Cooperatives. The article… Read More »Effectively Managing Capital Credits

The Role of the Cooperative Accountant

by David R. Cook Jr.
April 26, 2012May 22, 2023

AHC attorney David R. Cook recently spoke to a group of cooperative accountants about the role of accountants in cooperatives’ board meetings. The presentation focused on the duties of directors, officers, and in-house accountants to the cooperative and to each other.Read More »The Role of the Cooperative Accountant

IRS Confirms the Propriety of Discounting Capital Credits

by David R. Cook Jr.
November 4, 2011February 15, 2022

The latest AHC Cooperative Taxation Brief discusses the Internal Revenue Service’s recent private letter ruling that confirms its long-held stance on discounting capital credits. The… Read More »IRS Confirms the Propriety of Discounting Capital Credits

Class Action Continues Before State Public Service Commission

by David R. Cook Jr.
September 19, 2011February 15, 2022

Another class action proceeding has been filed against Carroll Electric Service Corporation, this time before the Arkansas Public Service Commission. In a previous post, we discussed the Arkansas Superior Court’s dismissal of a civil action filed against Carroll. This latest filing largely continues that litigation, just at a different forum.

New Capital Credits Lawsuit Targets Practice of Discounting Estates’ Capital Credits

by David R. Cook Jr.
February 23, 2011February 15, 2022

A new class action lawsuit was filed on behalf of deceased members of South River Electric Membership Corporation, based in Dunn, N.C. The complaint centers around the electric cooperative’s practice of discounting the capital credits of estates to present value, a common practice by many cooperatives.