26 U.S.C. § 522 — Untitled legal text

Page 1723 TITLE 26—INTERNAL REVENUE CODE § 526 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 pur- pose of purchasing supplies and equipment for the use of members or other persons, and turn- ing 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 as- sociation 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, which- ever is greater, on the value of the consider- ation for which the stock was issued, and if substantially all such stock (other than non- voting preferred stock, the owners of which are not entitled or permitted to participate, directly or indirectly, in the profits of the as- sociation, upon dissolution or otherwise, be- yond the fixed dividends) is owned by pro- ducers who market their products or purchase their supplies and equipment through the as- sociation. (3) Organizations maintaining reserve Exemption shall not be denied any such as- sociation 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 as- sociation which markets the products of non- members 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 mem- bers, provided the value of the purchases made for persons who are neither members nor pro- ducers 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 deter- mining the right to exemption under this sec- tion. (6) Netting of losses Exemption shall not be denied any such as- sociation because such association computes its net earnings for purposes of determining any amount available for distribution to pa- trons 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). (Aug. 16, 1954, ch. 736, 68A Stat. 176; Pub. L. 87–834, § 17(b)(1), Oct. 16, 1962, 76 Stat. 1051; Pub. L. 99–272, title XIII, § 13210(b), Apr. 7, 1986, 100 Stat. 324; Pub. L. 108–357, title III, § 316(b), Oct. 22, 2004, 118 Stat. 1469.) Editorial Notes AMENDMENTS 2004—Subsec. (b)(7). Pub. L. 108–357 added par. (7). 1986—Subsec. (b)(6). Pub. L. 99–272 added par. (6). 1962—Subsec. (a). Pub. L. 87–834 substituted ‘‘part I of subchapter T (sec. 1381 and following)’’ for ‘‘section 522’’ in two places. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–357, title III, § 316(c), Oct. 22, 2004, 118 Stat. 1469, provided that: ‘‘The amendments made by this section [amending this section and section 1388 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [Oct. 22, 2004].’’ EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–272 applicable to taxable years beginning after Dec. 31, 1962, see section 13210(c) of Pub. L. 99–272, set out as a note under section 1388 of this title. EFFECTIVE DATE OF 1962 AMENDMENT Amendment by Pub. L. 87–834 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 Pub. L. 87–834, set out as an Effective Date note under section 1381 of this title. [§ 522. Repealed. Pub. L. 87–834, § 17(b)(2), Oct. 16, 1962, 76 Stat. 1051] Section, act Aug. 16, 1954, ch. 736, 68A Stat. 177, re- lated to tax on farmers’ cooperatives. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable, except as otherwise provided, to taxable years of organizations described in section 1381(a) of this title beginning after Dec. 31, 1962, see sec- tion 17(c) of Pub. L. 87–834, set out as an Effective Date note under section 1381 of this title. PART V—SHIPOWNERS’ PROTECTION AND INDEMNITY ASSOCIATIONS Sec. 526. Shipowners’ protection and indemnity asso- ciations. Editorial Notes AMENDMENTS 1969—Pub. L. 91–172, title I, § 101(a), Dec. 30, 1969, 83 Stat. 492, substituted ‘‘PART V’’ for ‘‘PART IV’’ as part designation. § 526. Shipowners’ protection and indemnity as- sociations There shall not be included in gross income the receipts of shipowners’ mutual protection and indemnity associations not organized for profit, and no part of the net earnings of which inures to the benefit of any private shareholder; but such corporations shall be subject as other persons to the tax on their taxable income from interest, dividends, and rents. (Aug. 16, 1954, ch. 736, 68A Stat. 178.) PART VI—POLITICAL ORGANIZATIONS Sec. 527. Political organizations.