capital credit retirement

[monal]

can anyone tell me if retirement of capital credits is taxable income to anyone that has never taken a business or farming deduction for any tof the telephone expenses billed by a cooperative rural telephone company.. The retirement was because client reached the age of 75. thanks hope u understand what I am talking about

[monal]

patronage dividends

an addition to capital credit question......capital credits from this cooperative are the same as patronage dividends...if that helps.....there must be someone that has come across this issue.
thanks for any help I can get.

[Jiggers]

Capital Credits

Normally utilities in small or farming communities are Cooperatives. Non-profit corporations.

Each customer has an account and at the end of the year the profit is allocated to that customer.

When the cash is available, a percentage of that amount is paid back.

If the utility expense is personal, in your residence, and no tax deduction was ever taken for the expense, then you have a refund of your utility bill and is non-taxable to you.

If the utility expense is a business expense, such as for your farm or dairy, and you deducted that expense, then you have a reportable and taxable refund.

If the utility expense is for Office in Home expense, then you have income for the percentage that was deducted in the Office in Home expense.

[ChEAr$]

Roc

an addition to capital credit question......capital credits from this cooperative are the same as patronage dividends...if that helps.....there must be someone that has come across this issue.
thanks for any help I can get.

IF>... I recall correctly, when electricity came to my grandparents' farm back in 1947,
they had to "invest" in the coop. whether or not any of this contribution to capital, similar to buying common stock in a corporation, was returned to them, I don't know, but seems that what you case speaks of, a ROC (return of capital), and as such is not taxable UNLESS
it exceeds basis.

[ChEAr$]

Normally utilities in small or farming communities are Cooperatives. Non-profit corporations.

Each customer has an account and at the end of the year the profit is allocated to that customer.

When the cash is available, a percentage of that amount is paid back.

If the utility expense is personal, in your residence, and no tax deduction was ever taken for the expense, then you have a refund of your utility bill and is non-taxable to you.

If the utility expense is a business expense, such as for your farm or dairy, and you deducted that expense, then you have a reportable and taxable refund.

If the utility expense is for Office in Home expense, then you have income for the percentage that was deducted in the Office in Home expense.

And that too! grin

Just an hour ago I was selecting some new photos to publish on Facebook and almost
decided to include that one of you and me.
But didn't.
But could of course.
Unless you object.
Not that that would matter.

[monal]

thanks to u Jiggers

This is how I understood the issue. there was a business in the home for 25 years but since a telephone expense has not been a deductible expense since it was also a home phone # it was never used as a deduction..so therefore not taxable....right.....