
    Minster Loan & Savings Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 11899.
    Promulgated June 14, 1928.
    
      L. L. Hamby, Esq., for the petitioner.
    
      J. E. Marshall, Esq., for the respondent.
   OPINION.

Siefkin:.

The sole question to be decided in this proceeding is whether, during the year 1922, the petitioner was a building and loan association within the meaning of section 231 (4) of the Revenue Act of 1921, which provides:

Sec. 231. That the following organizations shall be exempt from taxation under this title — ■
⅝ ⅝ ⅜ * * ⅛ ⅝
(4) Domestic building and loan associations substantially all the business of which is confined to making loans to members; and cooperative banks without capital stock organized and operated for mutual purposes and without profit.

The evidence discloses that of the total loans made by the petitioner during the year 1922, only $800, slightly over 1 per cent, constituted loans made to nonmembers of the association but that during the same year, approximately 80 per cent of petitioner’s income was derived from loans outstanding during the year 1922, to nonmembers or nonstockholders.

In our opinion this large percentage of the income attributable to transactions with nonmembers requires that the petitioner be held not exempt since substantially all its business is not confined to making loans to members. See Broadview Savings & Loan Co., 10 B. T. A. 725.

Reviewed by the Board.

Judgment will be entered for the respondent.  