19 June 1995 Memorandum 950842 (C.T.O. "Patronage Dividends Paid by Non Co-ops")

Payment of a patronage dividend may be effected by the issuance of shares or debt instruments, where such an arrangement is authorized by the customer.

"Although it is usually a co-operative that deducts patronage dividends, this deduction is available to any taxpayer who qualifies including sole proprietors, partnerships and ordinary corporations." Payment of a patronage dividend may be affected by the issuance of shares.