The taxpayer, an insurance salesman, purchased life insurance policies on himself and several family members, seeking to earn sales commissions in excess of the premiums he expected to pay on the policies before cancelling.
Hogan J. found that the commissions were business income in the taxpayer's hands. The taxpayer had clearly bought the policies (and thus earned the commissions) in order to realize a profit. Moreover, leaving aside his intentions in the transaction in question, the commissions arose in the course of the taxpayer's practice as an insurance agent.