1046
PUBLIC LAW 87-834-OCT. 16, 1962
26 USC 801-843.
[76 STAT.
"(li) Subchapter L (relating to insurance companies),
or " (C) which is engaged in furnishing electric energy, or providing telephone service, to persons in rural areas. " (b) TAX ON CERTAIN" FARMERS' COOPERATIVES.—An organization described in subsection (a)(1) shall be subject to the taxes imposed 26 USC 11.1201. by section 11 or 1201. "SEC. 1382. TAXABLE INCOME OF COOPERATIVES. " (a) GROSS INCOME.—Except as provided in subsection (b), the
Post, p. 1049.
Post, p. 1051.
gross income of any organization to which this part applies shall be determined without any adjustment (as a reduction in gross receipts, an increase in cost of goods sold, or otherwise) by reason of any allocation or distribution to a patron out of the net earnings of such organization. "(b) PATRONAGE DIVIDENDS.—In determining the taxable income of an organization to which this part applies, there shall not be taken into account amounts paid during the payment period for the taxable year— " (1) as patronage dividends (as defined in section 1388(a)), to the extent paid in money, qualified written notices of allocation (as defined in section 1388(c)), or other property (except nonqualified written notices of allocation (as defined in section 1388(d))) with respect to patronage occurring during such taxable year; or "(2) in money or other property (except written notices of allocation) in redemption of a nonqualified written notice of allocation which was paid as a patronage dividend during the payment period for the taxable year during which the patronage occurred. For purposes of this title, any amount not taken into account under the preceding sentence shall be treated in the same manner as an item of gross income and as a deduction therefrom. "(c)
Ante, p. 1045.
DEDUCTION
FOR NONPATRONAGE
DISTRIBUTIONS,
ETC.—In
determining the taxable income of an organization described in section 1381(a)(1), there shall be allowed as a deduction (in addition to other deductions allowable under this chapter) — "(1) amounts paid during the taxable year as dividends on its capital stock; and "(2) amounts paid during the payment period for the taxable " (A) in money, qualified written notices of allocation, or other property (except nonqualified written notices of allocation) on a patronage basis to patrons with respect to its earnings during such taxable year which are derived from business done for the United States or any of its agencies or from sources other than patronage, or " (B) in money or other property (except written notices of allocation) in redemption of a nonqualified written notice of allocation which was paid, during the payment period for the taxable year during which the earnings were derived, on a patronage basis to a patron with respect to earnings derived from business or sources described in subparagraph (A). " (d) PAYMENT PERIOD FOR E A C H TAXABLE YEAR.—For purposes of
subsections (b) and (c)(2), the payment period for any taxable year is the period beginning with the first day of such taxable year and ending with the fifteenth day of the ninth month following the close of sucTi year. For purposes of subsections (b)(1) and (c)(2)(A), a
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