2012 US Code
Title 26 - Internal Revenue Code
Subtitle A - Income Taxes (§§ 1 - 1564)
Chapter 1 - NORMAL TAXES AND SURTAXES (§§ 1 - 1400U-3)
Subchapter T - Cooperatives and Their Patrons (§§ 1381 - 1388)
Part II - TAX TREATMENT BY PATRONS OF PATRONAGE DIVIDENDS AND PER-UNIT RETAIN ALLOCATIONS (§§ 1385)
Section 1385 - Amounts includible in patron's gross income
Publication Title | United States Code, 2012 Edition, Title 26 - INTERNAL REVENUE CODE |
Category | Bills and Statutes |
Collection | United States Code |
SuDoc Class Number | Y 1.2/5: |
Contained Within | Title 26 - INTERNAL REVENUE CODE Subtitle A - Income Taxes CHAPTER 1 - NORMAL TAXES AND SURTAXES Subchapter T - Cooperatives and Their Patrons PART II - TAX TREATMENT BY PATRONS OF PATRONAGE DIVIDENDS AND PER-UNIT RETAIN ALLOCATIONS Sec. 1385 - Amounts includible in patron's gross income |
Contains | section 1385 |
Date | 2012 |
Laws in Effect as of Date | January 15, 2013 |
Positive Law | No |
Disposition | standard |
Source Credit | Added Pub. L. 87-834, §17(a), Oct. 16, 1962, 76 Stat. 1048; amended Pub. L. 89-809, title II, §211(b)(1)-(4), Nov. 13, 1966, 80 Stat. 1582; Pub. L. 94-455, title XIX, §§1901(b)(3)(I), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1793, 1834. |
Statutes at Large References | 76 Stat. 1048 80 Stat. 1582 90 Stat. 1793 |
Public Law References | Public Law 87-834, Public Law 89-809, Public Law 94-455 |
Download PDF
Except as otherwise provided in subsection (b), each person shall include in gross income—
(1) the amount of any patronage dividend which is paid in money, a qualified written notice of allocation, or other property (except a nonqualified written notice of allocation), and which is received by him during the taxable year from an organization described in section 1381(a),
(2) any amount, described in section 1382 (c)(2)(A) (relating to certain nonpatronage distributions by tax-exempt farmers’ cooperatives), which is paid in money, a qualified written notice of allocation, or other property (except a nonqualified written notice of allocation), and which is received by him during the taxable year from an organization described in section 1381(a)(1), and
(3) the amount of any per-unit retain allocation which is paid in qualified per-unit retain certificates and which is received by him during the taxable year from an organization described in section 1381(a).
(b) Exclusion from gross incomeUnder regulations prescribed by the Secretary, the amount of any patronage dividend, and any amount received on the redemption, sale, or other disposition of a nonqualified written notice of allocation which was paid as a patronage dividend, shall not be included in gross income to the extent that such amount—
(1) is properly taken into account as an adjustment to basis of property, or
(2) is attributable to personal, living, or family items.
(c) Treatment of certain nonqualified written notices of allocation and certain nonqualified per-unit retain certificates (1) Application of subsectionThis subsection shall apply to—
(A) any nonqualified written notice of allocation which—
(i) was paid as a patronage dividend, or
(ii) was paid by an organization described in section 1381(a)(1) on a patronage basis with respect to earnings derived from business or sources described in section 1382(c)(2)(A), and
(B) any nonqualified per-unit retain certificate which was paid as a per-unit retain allocation.
(2) Basis; amount of gainIn the case of any nonqualified written notice of allocation or nonqualified per-unit retain certificate to which this subsection applies, for purposes of this chapter—
(A) the basis of such written notice of allocation or per-unit retain certificate in the hands of the patron to whom such written notice of allocation or per-unit retain certificate was paid shall be zero,
(B) the basis of such written notice of allocation or per-unit retain certificate which was acquired from a decedent shall be its basis in the hands of the decedent, and
(C) gain on the redemption, sale, or other disposition of such written notice of allocation or per-unit retain certificate by any person shall, to the extent that the stated dollar amount of such written notice of allocation or per-unit retain certificate exceeds its basis, be considered as ordinary income.
(Added Pub. L. 87–834, §17(a), Oct. 16, 1962, 76 Stat. 1048; amended Pub. L. 89–809, title II, §211(b)(1)–(4), Nov. 13, 1966, 80 Stat. 1582; Pub. L. 94–455, title XIX, §§1901(b)(3)(I), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1793, 1834.)
Amendments1976—Subsec. (b). Pub. L. 94–455, §1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (c)(2)(C). Pub. L. 94–455, §1901(b)(3)(I), substituted “ordinary income” for “gain from the sale or exchange of property which is not a capital asset”.
1966—Subsec. (a)(3). Pub. L. 89–809, §211(b)(1), added par. (3).
Subsec. (c). Pub. L. 89–809, §211(b)(2)–(4), inserted “and certain nonqualified per-unit retain certificates” in heading, inserted provisions to par. (1) for the application of the subsection to any nonqualified per-unit retain certificates which were paid as per-unit retain allocations, and inserted references to per-unit retain certificates in par. (2).
Effective Date of 1976 AmendmentAmendment by section 1901(b)(3)(I) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date of 1966 AmendmentAmendment by Pub. L. 89–809 applicable to per-unit retain allocations made during taxable years of an organization described in section 1381(a) of this title (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after Apr. 30, 1966, with respect to products delivered during such years, see section 211(e)(1) of Pub. L. 89–809, set out as a note under section 1382 of this title.
Effective DateSection 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 a note under section 1381 of this title.
Disclaimer: These codes may not be the most recent version. The United States Government Printing Office may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the US site. Please check official sources.