¶2It is the contention of the taxpayer that the stock of the Farmington Co. should not be classed as an inadmissible asset because the corporation is a cooperative venture. In support of this contention it urges that because of the method of operation of the Farmington Co., in meeting its expenses by assessment, it has never had earnings, has never paid dividends, and is not so constituted that it could pay dividends, and, consequently, such stock does not come within the terms of section 325 of the Revenue Act of 1918, reading-in part:
The term “inadmissible assets” means stocks, bonds, and other obligations (other than obligations of the United States), the dividends or interest from which is not included in computing net income. ⅜ …
¶3We have held, in the Appeal of Securities Investing Fund, Inc., 1 B. T. A. 279, 284, that—
The words “ the dividends or interest from which is not included in -computing net income ” identify a type or class of investment and that they have no reference to received income.
¶4*1215Under the provisions of section 326 of the Act, the stock can not be included in the invested capital of the taxpayer for the fiscal year involved, because the dividend derived therefrom is not included in computing net income.
¶5There is nothing, as far as the record shows, in the charter of the Farmington Co. to prevent its operation for profit. Under its charter it is privileged to operate in the manner of the ordinary stock corporation organized and operated for-profit. The fact that it elected to operate on a nonprofit basis certainly can have no effect on the type or class of investment to which its capital stock belongs.
¶6Considering these matters in the light of the interpretation above given to the words of the statute, we are of the opinion that the Commissioner’s action in excluding from invested capital the stock of the Farmington Co. held by the taxpayer must be sustained.
¶7Order of redetermination will be entered on 15 days’ notice, under Rule 50.