• Return to previous page.

Text size:

Printable Version

BNA Tax Portfolio Analyzes Taxation of Cooperatives and Their Patrons

NEWS RELEASE

Contacts:
Mark Carrington
(202) 530-1728

Washington, DC (August 2, 2007) – BNA®, publisher of the authoritative and universally recognized Tax Management Portfolios, has released the latest addition to the U.S. Income Series, Portfolio 744-2nd, Taxation of Cooperatives and Their Patrons.

Authored by Carla Neeley Freitag, Esq., the Portfolio analyzes the federal income tax treatment of cooperatives and their patrons under subchapter T of Chapter 1, Subtitle A, of the Internal Revenue Code. A cooperative is a business format in which patrons of the cooperative join together to transact business collectively. The two general categories of cooperatives governed by the favorable rules of subchapter T are exempt farmers’ cooperatives and certain nonexempt cooperatives.

This latest addition to the U.S. Income Series begins with a brief review of the history of the tax treatment of cooperatives and their patrons. It then examines the basic characteristics that identify an enterprise as a cooperative subject to subchapter T, particularly the requirement that such an enterprise operate “on a cooperative basis.”

The Portfolio then discusses in detail the requirements for qualifying as an exempt farmers’ cooperative under § 521 of the Code, including the limitation on permissible activities to marketing and purchasing functions, limitations on transactions with nonmembers, and requirements for distributions to patrons. After explaining the unique terminology employed in subchapter T, the Portfolio concludes with an exhaustive examination of how the subchapter T rules apply to prescribe the tax treatment of both cooperatives and their patrons.

This Portfolio may be cited as BNA Tax Portfolio 744-2nd Freitag, Taxation of Cooperatives and Their Patrons (U.S. Income).

Carla Neeley Freitag is a lawyer and author of The Funding of Living Trusts (American Bar Ass’n 2004). She has published a number of articles on tax aspects of charitable contributions and scholarship and educational expenses. She is the author of BNA Tax Management Portfolios: Unrelated Business Income Tax; Debt-Financed Income (Section 514); and Net Operating Losses—Concepts and Computations. She is the co-author of BNA Tax Management Portfolios: Charitable Contributions: Income Tax Aspects; and Scholarships and Educational Expenses. Ms. Freitag is a member of the Florida, Texas and Georgia bar associations.

# # #

About BNA®
BNA is a leading publisher of print and electronic news, analysis, and reference products, including the recently launched Accounting Policy & Practice Series.  BNA publications intensely cover legal and regulatory developments for professionals in business and government. BNA is the oldest wholly employee-owned company in the United States, and produces more than 350 news and information services — including Daily Labor Report and Daily Tax Report — widely respected for comprehensive and objective reporting and analysis.

For more information, contact Mark Carrington, BNA Tax & Accounting, at 202.530.1728.