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Understanding
Cooperatives
UNIT 4—Finance and Taxation of
Cooperatives
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Documents Unit 4
Teaching Tools:
Instructor
Discussion Guide
Quiz 4
Quiz 4 Answers
Unit 4
PowerPoint Slides
S 4.1 Who Finances the Business (Members)
S 4.2 Common Stock
S 4.3 Preferred Stock
S 4.3 Transferable Delivery Rights
S 4.5 Who Finances the Business (Owners)
S 4.6 Retained Patronage, Per-Unit Retains,
Equity Redemption
S 4.7 Who Finances the Business (Creditors)
S 4.8 How Cooperatives are Taxed
S 4.9 Taxation Example
S 4.10 Single Tax Treatment
S 4.12 Flow of Funds to Finance a Business
S 4.13 Flow of Funds Exhibit
Teacher References
CIR 55:
Co-ops 101
CIR 45,
Section 7: Financing Cooperatives
CIR 45,
Section 8: Income Tax Treatment of Cooperatives
Student References
CIR 5:
Cooperatives in Agribusiness
CIR 45,
Section 7: Financing Cooperatives
CIR 45,
Section 8: Income Tax Treatment of Cooperatives
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Unit 4 - Finance and Taxation of Cooperatives
Objective
The objective of this unit is to teach the
student how a cooperative is financed and taxed.
After completion, the student should:
1. Be able to explain the difference between
the two forms of capital – debt and equity.
2. Be able to explain how equity
capital is provided.
3. Be able to describe the various
ways a cooperative can obtain borrowed capital.
4. Be able to explain the single tax
principle and how it works for cooperatives.
5. Be able to trace the flow of cash
through a cooperative business.
Instructor Directions
1. Become familiar with the information
provided as well as the reference materials.
2. Lead the discussion using PowerPoint slides
and/or selected references provided. The discussion guide serves as an
outline.
3. Identify a cooperative in the area, and
research its financing characteristics by interviewing the local manager
and others.
4. Trace the cash flow through a cooperative
business.
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