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Patronage Income

AHC Cooperative Tax Brief: Telephone Cooperative’s Sale of Subsidiary

In the latest cooperative tax ruling, the Service ruled that a cooperative’s (“Cooperative”) gain on sale of stock in corporations that offered services to Cooperative’s members was patronage-sourced.  The ruling was important to Cooperative because it expected to fail the Member Income Test of Section 501(c)(12), subjecting Cooperative to regular corporate income tax.  The favorable ruling allowed Cooperative to avoid substantial taxes in the gain.

Read More »AHC Cooperative Tax Brief: Telephone Cooperative’s Sale of Subsidiary