Title 26 — Internal Revenue CodeRelease 119-73
§1381 Organizations to Which Part Applies
Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter T— Cooperatives and Their Patrons › Part I— TAX TREATMENT OF COOPERATIVES › § 1381
Summary
The special cooperative tax rules cover tax-exempt farmers' cooperatives and any other corporation that operates on a cooperative basis. They do not cover organizations that are already tax-exempt, mutual savings banks, insurance companies, or co-ops that supply electricity or phone service in rural areas. Farmers' cooperatives covered by these rules still pay the regular corporate income tax.
Full Legal Text
Title 26, §1381
Internal Revenue Code — Source: USLM XML via OLRC
(a)This part shall apply to—
(1)any organization exempt from tax under section 521 (relating to exemption of farmers’ cooperatives from tax), and
(2)any corporation operating on a cooperative basis other than an organization—
(A)which is exempt from tax under this chapter,
(B)which is subject to the provisions of—
(i)part II of subchapter H (relating to mutual savings banks, etc.), or
(ii)subchapter L (relating to insurance companies), or
(C)which is engaged in furnishing electric energy, or providing telephone service, to persons in rural areas.
(b)An organization described in subsection (a)(1) shall be subject to the tax imposed by section 11.
(c)For treatment of income from load loss transactions of organizations described in subsection (a)(2)(C), see section 501(c)(12)(H).
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2017—Subsec. (b). Pub. L. 115–97 substituted “tax imposed by section 11” for “taxes imposed by section 11 or 1201”. 2004—Subsec. (c). Pub. L. 108–357 added subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date
of 2017 AmendmentAmendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of Pub. L. 115–97, set out as a note under section 11 of this title.
Effective Date
of 2004 AmendmentAmendment by Pub. L. 108–357 applicable to taxable years beginning after Oct. 22, 2004, see section 319(e) of Pub. L. 108–357, set out as a note under section 501 of this title.
Effective Date
Pub. L. 87–834, § 17(c), Oct. 16, 1962, 76 Stat. 1051, 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 section 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].”
Reference
Citations & Metadata
Citation
26 U.S.C. § 1381
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73