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Rural Utility Cooperative Law Blog

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 are summaries of the presentations:

  • Strategies for Managing Capital Credits

Since capital credits involve legal, accounting, and tax considerations, they should be managed with care.  This session will cover the various laws, rules, and regulations affecting capital credits.  It will also cover key risks associated with mismanagement, including member disputes, financial pitfalls, and adverse IRS audits.  But more importantly, this session will discuss strategies for managing capital credits to avoid these risks.

  • Cooperative Guide to Handling Large Gains and Losses

Cooperatives occasionally benefit from a large gain on transactions such as spectrum sales or partnership liquidations. In certain circumstances these can be structured to qualify under the cooperative tax rules and not be subject to large tax liabilities. See examples of what could qualify and learn what steps should be taken to follow the IRS guidelines, how and whom to allocate to members, and potential patronage retirement issues that come up in future years. You will leave this session with a better understand of the options you have when planning for future sales of appreciated assets.

View David’s profile here.


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