[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1381-2]

[Page 786-787]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1381-2  Tax on certain farmers' cooperatives.

    (a) In general. (1) For taxable years beginning after December 31, 
1962, farmers', fruit growers', or like associations, organized and 
operated in compliance with the requirements of section 521 and Sec. 
1.521-1, shall be subject to the taxes imposed by section 11 or section 
1201. Although such associations are subject to both normal tax and 
surtax, as in the case of corporations generally, certain special 
deductions are provided for them in section 1382(c) and Sec. 1.1382-3. 
For the purpose of any law which refers to organizations exempt from 
income taxes such an association shall, however, be considered as an 
organization exempt under section 501. Thus, the provisions of section 
243, providing a credit for dividends received from a domestic 
corporation subject to taxation, are not applicable to dividends 
received from a cooperative association organized and operated in 
compliance with the requirements of section 521 and Sec. 1.521-1. The 
provisions of section 1501, relating to consolidated returns, are 
likewise not applicable.
    (2) Rules governing the manner in which amounts paid as patronage 
dividends are allowable as deductions in computing the taxable income of 
such an association are set forth in section 1382(b) and Sec. 1.1382-2. 
For the tax treatment, as to patrons, of amounts received during the 
taxable year as patronage dividends, see section 1385 and the 
regulations thereunder.
    (b) Cross references. For tax treatment of exempt cooperative 
associations for taxable years beginning before January 1, 1963, or for 
taxable years beginning after December 31, 1962, with respect to 
payments attributable to patronage occurring during taxable years 
beginning

[[Page 787]]

before January 1, 1963, see section 522 and the regulations thereunder. 
For requirements of annual returns by such associations, see sections 
6012 and 6072(d) and paragraph (f) of Sec. 1.6012-2.

[T.D. 6643, 28 FR 3153, Apr. 2, 1963]