[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: 26CFR1.1382-1]

[Page 787]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1382-1  Taxable income of cooperatives; gross income.

    (a) Introduction. Section 1382(b) provides that the amount of 
certain patronage dividends (and amounts paid in redemption of 
nonqualified written notices of allocation) shall not be taken into 
account by a cooperative organization in determining its taxable income. 
Such section also provides that, for purposes of the Internal Revenue 
Code, an amount not taken into account is to be treated in the same 
manner as an item of gross income and as a deduction therefrom. 
Therefore, such an amount is treated as a deduction for purposes of 
applying the Internal Revenue Code and the regulations thereunder and, 
for simplicity, is referred to as a deduction in the regulations under 
such Code. However, this should not be regarded as a determination of 
the character of the amount for other purposes.
    (b) Computation of gross income. Any cooperative organization to 
which part I, subchapter T, chapter 1 of the Code, applies shall not, 
for any purpose under the Code, exclude from its gross income (as a 
reduction in gross receipts, an increase in cost of goods sold, or 
otherwise) the amount of any allocation or distribution to a patron out 
of the net earnings of such organization with respect to patronage 
occurring during a taxable year beginning after December 31, 1962. See, 
however, section 1382(b) and Sec. 1.1382-2 for deductions for certain 
amounts paid to patrons out of net earnings.

[T.D. 6643, 28 FR 3154, Apr. 2, 1963]