Bloomberg Bloomberg
Comprehensive Tax Research. Practitioner to Practitioner. ®

Internal Revenue Code, § 1381. Organizations To Which Part Applies

I.R.C. § 1381(a) In General
This part shall apply to—
I.R.C. § 1381(a)(1)
any organization exempt from tax under section 521 (relating to exemption of farmers' cooperatives from tax), and
I.R.C. § 1381(a)(2)
any corporation operating on a cooperative basis other than an organization--
I.R.C. § 1381(a)(2)(A)
which is exempt from tax under this chapter,
I.R.C. § 1381(a)(2)(B)
which is subject to the provisions of—
I.R.C. § 1381(a)(2)(B)(i)
part II of subchapter H (relating to mutual savings banks, etc.), or
I.R.C. § 1381(a)(2)(B)(ii)
subchapter L (relating to insurance companies), or
I.R.C. § 1381(a)(2)(C)
which is engaged in furnishing electric energy, or providing telephone service, to persons in rural areas.
I.R.C. § 1381(b) Tax On Certain Farmers' Cooperatives
An organization described in subsection (a)(1) shall be subject to the tax imposed by section 11.
I.R.C. § 1381(c) Cross Reference
For treatment of income from load loss transactions of organizations described in subsection (a)(2)(C), see section 501(c)(12)(H).
(Added Pub. L. 87-834, 17(a), Oct. 16, 1962, 76 Stat. 1045; Amended by Pub. L. 108-357, title III, Sec. 319(d), Oct. 22, 2004, 118 Stat. 1418; Pub. L. 115-97, title I, Sec. 13001(b)(2)(O), Dec. 22, 2017, 131 Stat. 2054.)
BACKGROUND NOTES
Amendments to Subchapter
1966--Pub. L. 89-809, title II, 211(b)(5), Nov. 13, 1966, 80 Stat. 1582, inserted “and per-unit retain allocations" in heading of part II.
1962--Pub. L. 87-834, 17(a), Oct. 16, 1962, 76 Stat. 1045, added headings of subchapter T and of parts I to III.
Amendments to Part
1966--Pub. L. 89-809, title II, 211(a)(8), Nov. 13, 1966, 80 Stat. 1582, inserted “or nonqualified per-unit retain certificates” in item 1383.
1962--Pub. L. 87-834, 17(a), Oct. 16, 1962, 76 Stat. 1045, added heading of part I and items 1381 to 1383.
AMENDMENTS
2017 - Subsec. (b). Pub. L. 115-97, Sec. 13001(b)(2)(O), amended subsec. (b) by substituting “tax imposed by section 11” for “taxes imposed by section 11 or 1201”.
2004 - Subsec. (c). Pub. L. 108-357, Sec. 319(d), added subsec. (c).
EFFECTIVE DATE OF 2017 AMENDMENT
Amendment by Sec. 13001(b)(2)(O) of Pub. L. 115-97 effective for taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2004 AMENDMENT
Amendment by Sec. 319(d) of Pub. L. 108-357 effective for taxable years beginning after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
EFFECTIVE DATE
Section 17(c) of Pub. L. 87-834, as amended by Pub. L. 99-514, 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(1) For the cooperatives.--Except as provided in paragraph (3), the amendments made by subsections (a) and (b) [enacting this subchapter, amending sections 521 and 6072 of this title, and repealing section 522 of this title] shall apply to taxable years of organizations described in section 1381(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) beginning after December 31, 1962.
“(2) For the patrons.--Except as provided in paragraph (3), section 1385 of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply with respect to any amount received from any organization described in section 1381(a) of such Code, to the extent that such amount is paid by such organization in a taxable year of such organization beginning after December 31, 1962.
“(3) Application of existing law.--In the case of any money, written notice of allocation, or other property paid by any organization described in section 1381(a)--
“(A) before the first day of the first taxable year of such organization beginning after December 31, 1962, or
“(B) on or after such first day with respect to patronage occurring before such first day, the tax treatment of such money, written notice of allocation, or other property (including the tax treatment of gain or loss on the redemption, sale, or other disposition of such written notice of allocation) by any person shall be made under the Internal Revenue Code of 1986 without regard to subchapter T of chapter 1 of such Code [this subchapter].”