Elmer G. Overly and Mary H. Overly v. Commissioner of Internal Revenue

PER CURIAM. The decisive question in this case is whether the income received by one of the taxpayers by way of salary for his personal services was income from a “trade or business regularly carried on by the taxpayer” within the meaning of section 122(d) (5) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 122(d) (5), relating to the net operating loss deduction. The Tax Court held that it was such income and upheld the Commissioner’s computation of the taxpayers’ income tax liability for the year 1951 on that basis. In so doing the Court followed and applied the decision of our brethren of the Second Circuit in Folker v. Johnson, 1956, 230 F.2d 906, in which this question was squarely raised and decided. We find ourselves in complete accord with the conclusions reached in that case and think it unnecessary to elaborate them here. It is sufficient to say that the decision under review must be affirmed upon the authority of that case and that to the extent that Hughes v. Commissioner, 10 Cir., 1930, 38 F.2d 755, decides otherwise we think it wrongly decided and do not choose to follow it. The decision of the Tax Court will be affirmed.