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26 U.S.C. § 521 — Exemption of farmers’ cooperatives from tax
Federal law — U.S. Code and appendices · legal_authorities
**(a) Exemption from tax** A farmers’ cooperative organization described in subsection (b)(1) shall be exempt from taxation under this subtitle except as otherwise provided in part I of subchapter T (sec. 1381 and following). Notwithstanding part I of subchapter T (sec. 1381 and following), such an organization shall be considered an organization exempt from income taxes for purposes of any law which refers to organizations exempt from income taxes.
**(b) Applicable rules**
(1) **Exempt farmers’ cooperatives** — The farmers’ cooperatives exempt from taxation to the extent provided in subsection (a) are farmers’, fruit growers’, or like associations organized and operated on a cooperative basis (A) for the purpose of marketing the products of members or other producers, and turning back to them the proceeds of sales, less the necessary marketing expenses, on the basis of either the quantity or the value of the products furnished by them, or (B) for the purpose of purchasing supplies and equipment for the use of members or other persons, and turning over such supplies and equipment to them at actual cost, plus necessary expenses.
(2) **Organizations having capital stock** — Exemption shall not be denied any such association because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal rate of interest in the State of incorporation or 8 percent per annum, whichever is greater, on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the association, upon dissolution or otherwise, beyond the fixed dividends) is owned by producers who market the
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Stable record: federal_law:legal_authorities:record_usc_1335d807b04162d0a6772262
Source file: Laws/federal/codes/united-states-code/title-26/section-521-exemption-of-farmers-cooperatives-from-tax--cc8f55309c.md
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Source location: Title 26, Chapter 1, § 521; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Exemption from tax** A farmers’ cooperative organization described in subsection (b)(1) shall be exempt from taxation under this subtitle except as otherwise provided in part I of subchapter T (sec. 1381 and following). Notwithstanding part I of subchapter T (sec. 1381 and following), such an organization shall be considered an organization exempt from income taxes for purposes of any law which refers to organizations exempt from income taxes.
**(b) Applicable rules**
(1) **Exempt farmers’ cooperatives** — The farmers’ cooperatives exempt from taxation to the extent provided in subsection (a) are farmers’, fruit growers’, or like associations organized and operated on a cooperative basis (A) for the purpose of marketing the products of members or other producers, and turning back to them the proceeds of sales, less the necessary marketing expenses, on the basis of either the quantity or the value of the products furnished by them, or (B) for the purpose of purchasing supplies and equipment for the use of members or other persons, and turning over such supplies and equipment to them at actual cost, plus necessary expenses.
(2) **Organizations having capital stock** — Exemption shall not be denied any such association because it has capital stock, if the dividend rate of such stock is fixed at not to exceed the legal rate of interest in the State of incorporation or 8 percent per annum, whichever is greater, on the value of the consideration for which the stock was issued, and if substantially all such stock (other than nonvoting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the association, upon dissolution or otherwise, beyond the fixed dividends) is owned by producers who market their products or purchase their supplies and equipment through the association.
(3) **Organizations maintaining reserve** — Exemption shall not be denied any such association because there is accumulated and maintained by it a reserve required by State law or a reasonable reserve for any necessary purpose.
(4) **Transactions with nonmembers** — Exemption shall not be denied any such association which markets the products of nonmembers in an amount the value of which does not exceed the value of the products marketed for members, or which purchases supplies and equipment for nonmembers in an amount the value of which does not exceed the value of the supplies and equipment purchased for members, provided the value of the purchases made for persons who are neither members nor producers does not exceed 15 percent of the value of all its purchases.
(5) **Business for the United States** — Business done for the United States or any of its agencies shall be disregarded in determining the right to exemption under this section.
(6) **Netting of losses** — Exemption shall not be denied any such association because such association computes its net earnings for purposes of determining any amount available for distribution to patrons in the manner described in paragraph (1) of section 1388(j).
(7) **Cross reference** — For treatment of value-added processing involving animals, see section 1388(k).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** This part shall apply to—
(1) any organization exempt from tax under section 521 (relating to exemption of farmers’ cooperatives from tax), and
(2) any corporation operating on a cooperative basis other than an organization—
(A) which is exempt from tax under this chapter,
(B) which is subject to the provisions of—
(i) part II of subchapter H (relating to mutual savings banks, etc.), or
(ii) 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 tax imposed by section 11.
**(c) Cross reference** For treatment of income from load loss transactions of organizations described in subsection (a)(2)(C), see section 501(c)(12)(H).
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1381
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Patronage dividend** For purposes of this subchapter, the term “patronage dividend” means an amount paid to a patron by an organization to which part I of this subchapter applies—
(1) on the basis of quantity or value of business done with or for such patron,
(2) under an obligation of such organization to pay such amount, which obligation existed before the organization received the amount so paid, and
(3) which is determined by reference to the net earnings of the organization from business done with or for its patrons.
Such term does not include any amount paid to a patron to the extent that (A) such amount is out of earnings other than from business done with or for patrons, or (B) such amount is out of earnings from business done with or for other patrons to whom no amounts are paid, or to whom smaller amounts are paid, with respect to substantially identical transactions. 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.
**(b) Written notice of allocation** For purposes of this subchapter, the term “written notice of allocation” means any capital stock, revolving fund certificate, retain certificate, certificate of indebtedness, letter of advice, or other written notice, which discloses to the recipient the stated dollar amount allocated to him by the organization and the portion thereof, if any, which constitutes a patronage dividend.
**(c) Qualif
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1388
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Exempted securities** Except as hereinafter expressly provided, the provisions of this subchapter shall not apply to any of the following classes of securities:
(1) Reserved.
(2) Any security issued or guaranteed by the United States or any territory thereof, or by the District of Columbia, or by any State of the United States, or by any political subdivision of a State or territory, or by any public instrumentality of one or more States or territories, or by any person controlled or supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by the Congress of the United States; or any certificate of deposit for any of the foregoing; or any security issued or guaranteed by any bank; or any security issued by or representing an interest in or a direct obligation of a Federal Reserve bank; or any interest or participation in any common trust fund or similar fund that is excluded from the definition of the term “investment company” under section 3(c)(3) of the Investment Company Act of 1940 [[15 U.S.C. 80a–3(c)(3)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section80a–3/c/3&num=0&edition=prelim)]; or any security which is an industrial development bond (as defined in section 103(c)(2) 11 See References in Text note below. of title 26) the interest on which is excludable from gross income under section 103(a)(1) 1 of title 26 if, by reason of the application of paragraph (4) or (6) of section 103(c) 1 of title 26 (determined as if paragraphs (4)(A), (5), and (7) were not included in such section 103(c)),1 paragraph (1) of such section 103(c) 1 does not apply to such security; or any interest or participation in a single trust fund, or in a collective trust fund maintained by a bank, o
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 77c
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Federal law — U.S. Code and appendices · legal_authorities
Page 1722
TITLE 26—INTERNAL REVENUE CODE
§ 515
‘‘(B) A partnership is described in this paragraph
if—
‘‘(i) before March 6, 1984, the partnership was or-
ganized and publicly announced, the maximum
amount of interests which would be sold in such
partnership, and
‘‘(ii) the marketing of partnership interests in
such partnership is completed not later than the
90th day after the date of the enactment of this Act
[July 18, 1984] and the aggregate amount of inter-
ests in such partnership sold does not exceed the
maximum amount described in clause (i).
For purposes of clause (i), the maximum amount
taken into account shall be the greatest of the
amounts shown in the registration statement, pro-
spectus, or partnership agreement.
‘‘(C) BINDING CONTRACTS.—For purposes of this para-
graph, property shall be deemed to have been ac-
quired before January 1, 1986, if such property is ac-
quired pursuant to a written contract which, on Jan-
uary 1, 1986, and at all times thereafter, required the
acquisition of such property and such property is
placed in service not later than 6 months after the
date such contract was entered into.’’
EFFECTIVE DATE OF 1980 AMENDMENT
Pub. L. 96–605, title I, § 110(c), Dec. 28, 1980, 94 Stat.
3526, provided that: ‘‘The amendment made by sub-
section (a) [amending this section] shall apply to tax-
able years beginning after December 31, 1980.’’
EXTENSION OF 1980 AMENDMENT OF THIS SECTION TO
OTHER PERSONS
Pub. L. 96–605, title I, § 110(b), Dec. 28, 1980, 94 Stat.
3526, provided that: ‘‘The amendment made by sub-
section (a) [amending this section] shall not be consid-
ered a precedent with respect to extending such amend-
ment (or similar rules) to any other person.’’
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by Pub. L. 95–345 ap
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 521
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