EXEMPT ORGANIZATIONS

Rev. Rul. 2002–54, page 527. Tax-exempt electric cooperatives. A tax-exempt electric cooperative’s distribution and sale of propane in tanks to members is not a tax-exempt activity under section 501(c)(12)(A) of the Code and may adversely affect its tax-exempt status under section 501(c)(12). If the tax-exempt status of the electric cooperative is not adversely affected, income derived from this activity is unrelated business income and subject to unrelated business income tax. The income is treated as nonmember income for purposes of calculating the 85 percent member income test under section 501(c)(12)(A).