26 USC 1388 - Definitions; special rules

1 So in original. Probably should be “mean”.

earnings and losses, respectively, which are derived from business done with or for patrons of the organization.

Editorial Notes

Amendments

2004—Subsec. (a). Puspan. L. 108–357, § 312(a), inserted at end of concluding provisions “For purposes of paragraph (3), net earnings shall not be reduced by amounts paid during the year as dividends on capital stock or other proprietary capital interests of the organization to the extent that the articles of incorporation or bylaws of such organization or other contract with patrons provide that such dividends are in addition to amounts otherwise payable to patrons which are derived from business done with or for patrons during the taxable year.”

Subsec. (k). Puspan. L. 108–357, § 316(a), added subsec. (k).

1990—Subsec. (k). Puspan. L. 101–508 struck out subsec. (k) which cross-referenced section 46(h) for provisions relating to apportionment of investment credit between cooperative organizations and their patrons.

1986—Subsecs. (j), (k). Puspan. L. 99–272 added subsec. (j) and redesignated former subsec. (j) as (k).

1978—Subsec. (j). Puspan. L. 95–600 added subsec. (j).

1976—Subsec. (c)(2)(B)(i). Puspan. L. 94–455, § 1901 (a)(153)(A), substituted “October 16, 1962” for “the date of the enactment of the Revenue Act of 1962”.

Subsec. (h)(2)(B)(i). Puspan. L. 94–455, § 1901(a)(153)(B), substituted “November 13, 1966” for “the date of the enactment of this subsection”.

1969—Subsec. (f). Puspan. L. 91–172 struck out reference to allocations made by organizations other than by payment of money or other property except per-unit retain certificates.

1966—Subsec. (e). Puspan. L. 89–809, § 211(c)(1), inserted references to per-unit retain certificates.

Subsecs. (f) to (i). Puspan. L. 89–809, § 211(c)(2), added subsecs. (f) to (i).

Statutory Notes and Related Subsidiaries

Effective Date of 2004 Amendment

Puspan. L. 108–357, title III, § 312(span), Oct. 22, 2004, 118 Stat. 1467, provided that: “The amendment made by this section [amending this section] shall apply to distributions in taxable years beginning after the date of the enactment of this Act [Oct. 22, 2004].”

Amendment by section 316(a) of Puspan. L. 108–357 applicable to taxable years beginning after Oct. 22, 2004, see section 316(c) of Puspan. L. 108–357, set out as a note under section 521 of this title.

Effective Date of 1990 Amendment

Amendment by Puspan. L. 101–508 applicable to property placed in service after Dec. 31, 1990, but not applicable to any transition property (as defined in section 49(e) of this title), any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of this title, and any property described in section 46(span)(2)(C) of this title, as such sections were in effect on Nov. 4, 1990, see section 11813(c) of Puspan. L. 101–508, set out as a note under section 45K of this title.

Effective Date of 1986 Amendment

Puspan. L. 99–272, title XIII, § 13210(c), Apr. 7, 1986, 100 Stat. 324, provided that:

“(1)In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and section 521 of this title] shall apply to taxable years beginning after December 31, 1962.

“(2)Notification requirement.—The provisions of section 1388(j)(3) of the Internal Revenue Code of 1954 [now 1986] (as added by subsection (a)) shall apply to taxable years beginning on or after the date of the enactment of this Act [Apr. 7, 1986].

“(3)No inference.—Nothing in the amendments made by this section [amending this section and section 521 of this title] shall be construed to infer that a change in law is intended as to whether any patronage earnings may or not be offset by nonpatronage losses, and any determination of such issue shall be made as if such amendments had not been enacted.”

Effective Date of 1978 Amendment

Amendment by Puspan. L. 95–600 applicable to taxable years ending after October 31, 1978, see section 316(c) of Puspan. L. 95–600, set out as a note under section 46 of this title.

Effective Date of 1969 Amendment

Amendment by Puspan. L. 91–172 applicable to per-unit retain allocations made after Oct. 9, 1969, see section 911(c) of Puspan. L. 91–172, set out as a note under section 1382 of this title.

Effective Date of 1966 Amendment

Amendment by Puspan. L. 89–809 applicable to per-unit retain allocations made during taxable years of an organization described in section 1381(a) of this title (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after Apr. 30, 1966, with respect to products delivered during such years, see section 211(e)(1) of Puspan. L. 89–809, set out as a note under section 1382 of this title.

Effective Date

Section applicable, except as otherwise provided, to taxable years of organizations described in section 1381(a) of this title beginning after Dec. 31, 1962, see section 17(c) of Puspan. L. 87–834, set out as a note under section 1381 of this title.

Savings Provision

For provisions that nothing in amendment by Puspan. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(span) of Puspan. L. 101–508, set out as a note under section 45K of this title.

Per-Unit Retain Certificates Covered by Written Agreements Between Oct. 14, 1965, and Nov. 13, 1966: Transition Treatment of By-Law Provisions

Puspan. L. 89–809, title II, § 211(f), Nov. 13, 1966, 80 Stat. 1584, provided that a written agreement between a patron and a cooperative association which met certain qualifications and was entered into after Oct. 14, 1965 and before Nov. 13, 1966, and which was in effect on Nov. 13, 1966, was to be treated for purposes of subsec. (h) of this section as if entered into after Nov. 13, 1966.