Citations
- 624 F.2d 1041
Full opinion text
OPINION
PER CURIAM:
This federal income tax refund case comes before the court on both parties’ exceptions to the recommended decision of Trial Judge Harkins filed on August 8, 1979.
The plaintiff is a nonexempt cooperative corporation. The questions are whether three items of the plaintiff’s income for 1972 and 1973 were patronage sourced income under section 1382(b) of the Internal Revenue Code of 1954 and therefore deductible from the plaintiff’s gross income. These items are: (1) interest received on demand deposits in Farm Credit Banks or on loans to brokerage firms; (2) interest received on federal bonds the plaintiff purchased to maintain liquidity; and (3) a gain of $386 upon the sale of an automobile used in the plaintiff’s business. The trial judge held that items (1) and (2) were patronage sourced and deductible but that item (3) was not patronage sourced and therefore was not deductible.
Upon consideration of the briefs and after oral argument, we agree with the trial judge’s conclusion with respect to the first two items and a