Sec. 1.1381-2 Tax on certain farmers' cooperatives.

For taxable years beginning after December 31, 1962, farmers', fruit growers', or like associations, organized and operated in compliance with the requirements of section

and section

, shall be subject to the taxes imposed by section

or section

. Although such associations are subject to both normal tax and surtax, as in the case of corporations generally, certain special deductions are provided for them in section

and section

. For the purpose of any law which refers to organizations exempt from income taxes such an association shall, however, be considered as an organization exempt under section

. Thus, the provisions of section

, providing a credit for dividends received from a domestic corporation subject to taxation, are not applicable to dividends received from a cooperative association organized and operated in compliance with the requirements of section

and section

. The provisions of section

, relating to consolidated returns, are likewise not applicable.

(2) Rules governing the manner in which amounts paid as patronage dividends are allowable as deductions in computing the taxable income of such an association are set forth in section 1382(b) and section 1.1382-2. For the tax treatment, as to patrons, of amounts received during the taxable year as patronage dividends, see section 1385 and the regulations thereunder.