Section of Taxation Publications
  VOL. 58
NO. 2
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 Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.
 Patronage-Sourced Income: An Expanding Universe
Clayton S. Reynolds*

*Partner, Orrick, Herrington & Sutcliffe, LLP, New York, New York; Trinity College, Cambridge, B.A., 1976; Harvard University, J.D., 1979; New York University, LL.M. (Tax), 1987.


For taxable cooperatives, the distinction between patronage and nonpatronage-sourced income is critical. Subsequent to the publication of Revenue Ruling 69-576, there has been a notable expansion of the types of income that have been determined to qualify as patronage-sourced (sometimes with the approval of the Service but, often, in the face of Service opposition). This Article summarizes developments in this area and argues that further expansion is appropriate, especially in connection with the characterization of interest income.


Published by
Section of Taxation, American Bar Association
With the Assistance of
Georgetown University Law Center


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