Court Opinion

ID: 4479152
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:30.025658+00
Date Added: 2024-06-11T15:03:32.139532
License: Public Domain

Atkins, J., dissenting: Section 501(c) (4) of the Internal Eevenue Code of 1954 provides for the exemption of “Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare * * *.” (Emphasis supplied.) The petitioner was organized by World War II veterans and others to purchase certain surplus defense housing projects and to utilize the projects as homes for its members on a cooperative basis. Preference was given to veterans, but others might become members. Each member purchased a right to perpetual use of a dwelling in the project, making monthly payments to the petitioner to cover principal and interest payments and operating costs. The corporation acted gratuitously on behalf of its members only. While the housing involved was low-cost housing and while it might be considered that in making these homes available to its members the petitioner was supplying some public need, it is my view that the petitioner was not operated exclusively for the promotion of social welfare within the intendment of the statute. In final analysis, the petitioner was a mutual or cooperative housing corporation operating for the benefit of its members only. Such a corporation is not exempt from tax. While in the case of many, if not most, cooperative housing corporations the homes or apartments are not of low cost, this is not a sufficient ground for distinction. It is my opinion that the petitioner is not exempt from tax. TURNER, Kern, Bruce, Pierce, and Scott, //., agree with this dissent.