Vern H. Moberg and Reta N. Moberg v. Commissioner of Internal Revenue

*338MOORE, Circuit Judge:

On April 10, 1947, the petitioner Yern H. Moberg, in partnership with his brother Theodore E. Moberg, purchased from Hugh A. and John F. McCullough, the exclusive right to use patented Dairy Queen freezers in the States of Washington and Oregon, together with the right to grant sub-licenses in any portion of those States. In order to raise money for the effective exploitation of their franchise, the Moberg brothers in 1947, 1948 and 1949 granted subfranchises for various parts of those States to different people. Although the subfranchise contracts varied as to their…