Patronage Dividend

Patronage Dividend
A dividend or distribution that a co-operative pays to its members or investors. Patronage dividends are given based on a proportion of profit made by the business. Once this amount is figured out the dividend is calculated according to how much each member has used the co-op's services. Tax rules view these profits essentially as an overcharge, which can be returned to patrons and deducted from the co-op's taxable income.

As the name implies, patronage dividends are paid to individuals as a result of belonging to the co-operative. One example can be seen when families purchase groceries through a co-operative and receive income or a credit on their account in return. Although they are taxed as ordinary dividend income, they may also contain an alternative minimum tax adjustment amount and are usually reported on Form 1099-PATR. Some co-ops will use the dividends to reduce the selling price of items, thus, in a way, the more you spend the more you receive.


Investment dictionary. . 2012.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • patronage dividend — A dividend distributed by a cooperative association, not because of any interest in the cooperative owned by the distributee, but because of his patronage of the business conducted by the association. Internal Revenue Code § 116 (b) (2) (A). A… …   Ballentine's law dictionary

  • Dividend — This article is about financial dividends. For dividends in arithmetic, see Division (mathematics). Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis  …   Wikipedia

  • patronage refund — See patronage dividend …   Ballentine's law dictionary

  • Patronage — is the support, encouragement, privilege and often financial aid given by a person or an organization. It can also refer to the right of bestowing offices or church benefices, the business given by a regular customer, and the guardianship of… …   Wikipedia

  • Loyalty program — – Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior behavior which is potentially beneficial to the firm.[1] Various loyalty cards In marketing generally and in retailing more… …   Wikipedia

  • Trading stamp — Trading stamps are small paper coupons given to customers by merchants. These stamps have no value individually, but when a customer saves up a certain number of them, they can be exchanged with the trading stamp company for other merchandise.… …   Wikipedia

  • Lothian, Borders & Angus Co-operative Society — Infobox Co operative company name = Lothian, Borders Angus Co operative Society company company type = Consumer co operative foundation = 1839 (or earlier) location = Galashiels key people = I.F.B. Hewat, President [Cite web… …   Wikipedia

  • Rochdale Pioneers — The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co operative, and the first to pay a patronage dividend, forming the basis for the modern co operative movement. [John K. Walton… …   Wikipedia

  • Arctic Cooperative — Infobox Co operative company name = Arctic Co operative Limited company company type = Service Cooperative foundation = 1972 location = Winnipeg, Manitoba key people = Andy Morrison (CEO) [http://www.arcticco op.com/about acl officers.htm… …   Wikipedia

  • Rochdale Society of Equitable Pioneers — The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co operative, and the first to pay a patronage dividend, forming the basis for the modern co operative movement.[1] Although other cooperatives preceded them,[2]… …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”