Sale of Taxable Telephone Cooperative’s Subsidiary Generated Patronage-Sourced Income
A recent IRS ruling addresses how one taxable telephone cooperative managed to avoid a devastating taxable gain on the sale of its interest in a subsidiary.
A recent IRS ruling addresses how one taxable telephone cooperative managed to avoid a devastating taxable gain on the sale of its interest in a subsidiary.
A previous AHC Cooperative Tax Brief posed the question: “Why would a cooperative give up the benefits of tax exemption?” In two recent private letter… Read More »Exempt Electric Cooperatives Surrender Their Tax-Exempt Status to Qualify for Additional Financing
While most electric cooperatives are tax exempt under Tax Code Section 501(c)(12), some of them operate as “taxable” cooperatives that are subject to a special body of federal tax law in effect before the enactment of Subchapter T in 1962. But what is a taxable cooperative, what is Subchapter T, and why would a cooperative relinquish the benefits of tax exemption? A recent IRS ruling sheds some light on these questions. The latest AHC Cooperative Taxation Brief by AHC Attorney David R. Cook Jr. discusses this IRS ruling and its implication for cooperatives.