Carlen

This case comes to us for review of a decision of the Tax Court. 1 The income taxes here involved are for the tax years 1947, 1948, 1949 and 1950.

Reference should be had to the opinion and findings of the Tax Court which fully outline the pertinent and basic facts in the instant case and provide a clear picture of the problem before this Court. The parties stipulated (among other matters) to certain facts which were also found by the Tax Court and included in its findings by reference thereto. In this stipulation of facts the parties agreed that the single issue presented (in all of the series of six cases) is the right of the taxpayers to the benefit of section 117 (k) of the Internal Revenue Code, 26 U.S.C.A. § 117 (k), in computing the income of the partnership of McKay and Carien, and in computing the tax liability of these partners for each of the years herein involved. It was also stipulated that section 117(k) (1) and (2) of the Internal Revenue Code is the controlling section here involved and that the applicable regulations are Regulations 111, Section 29.117-8; also that the taxpay- *339 era elected in their respective income tax returns and in the partnership income…