Apartment Operations Ass'n v. Commissioner

The question presented by this petition for review is whether, during the taxable year 1938, the petitioner was a business league within the provisions of § 101(7) of the Revenue Act of 1938, 26 U.S.C.A. Int.Rev.Code, § 101(7), exempting from income tax “business leagues, chambers of commerce, real-estate boards, or boards of trade, not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual * * *.”

Petitioner was originally formed as a voluntary association of apartment owners. In 1937 it was incorporated under a statute of the State of Washington relating to nonprofit corporations. Its membership is limited to owners of three or more rental units of a certain classification in King County, Washington. It has no capital stock and pays no dividends.

As stated in its articles, the objects and purposes for which the petitioner was formed are as follows:

(a) To provide a mutual benefit organization not operated for profit, for the purpose of gathering and distributing facts, data, and information relative to the ownership, operation, and general conduct of apartment houses and the apartment house business in…