[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: 26CFR1.1382-5]

[Page 790]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1382-5  Taxable income of cooperatives; products marketed under 
pooling arrangements.

    For purposes of section 1382(b) and Sec. 1.1382-2, in the case of a 
pooling arrangement for the marketing of products the patronage under 
such pool shall be treated as occurring during the taxable year in which 
the pool closes. The determination of when a pool is closed will be made 
on the basis of the facts and circumstances in each case, but generally 
the practices and operations of the cooperative organization shall 
control. This section may be illustrated by the following example:

    Example: Farmer A delivers to the X Cooperative 100 bushels of wheat 
on August 15, 1963, at which time he receives a per bushel advance. 
(Both farmer A and the X Cooperative file returns on a calendar year 
basis.) On October 15, 1963 farmer A receives an additional per bushel 
payment. The pool sells some of its wheat in 1963 and the remainder in 
January of 1964. The pool is closed on February 15, 1964. For purposes 
of section 1382(b), A's patronage is considered as occurring in 1964.

[T.D. 6643, 28 FR 3156, Apr. 2, 1963]