Individual returns for 1948, by adjusted gross income classes: Number of returns, income or loss from each of the sources comprising adjusted gross income, aggregate positive and negative income, adjusted gross income; and for returns with itemized deductions the adjusted gross income, deductions, net income, and net deficit-Con. [Adjusted gross income classes and money figures in thousands of dollars]

Individual returns for 1948, by adjusted gross income classes: Number of returns, income or loss from each of the sources comprising adjusted gross income, aggregate positive and negative income, adjusted gross income; and for returns with itemized deductions the adjusted gross income, deductions, net income, and net deficit-Con. (Adjusted gross income classes and money figures in thousands of dollars]

For footnotes, see pp. 41-42; for extent to which data are estimated, see pp. 44-52.

Individual returns for 1948, by adjusted gross income classes: Items of income or loss from each source shown as percentage of aggregate positive income; and for returns with itemized deductions, items of deductions shown as percentage of adjusted gross

For footnotes, see pp. 41-42; for extent to which data are estimated, see pp. 44-52.

Individual returns for 1948, by adjusted gross income classes: Items of income or loss from each source shown as percentage of aggregate positive income; and for returns with itemized deductions, items of deductions shown as percentage of adjusted gross income-Continued

Adjusted gross income classes 1 (Thousands of dollars)

Returns with itemized deductions "-Deductions shown as percentage of adjusted gross income 2

For footnotes, see pp. 41-42; for extent to which data are estimated, see pp. 44-52.

NET GAIN OR LOSS FROM SALES OR EXCHANGES OF CAPITAL ASSETS

Net gain or loss from sales of capital assets is derived from sales of property defined by the Internal Revenue Code as capital assets. The term, capital assets, means property held by the taxpayer (whether or not connected with his trade or business), but does not include (1) stock in trade or other property which would properly be included in inventory if on hand at the close of the income year, (2) property held primarily for sale to customers in the ordinary course of trade or business (3) property used in trade or business of a character which is subject to the allowance for depreciation, (4) an obligation of the United States or any possession thereof, or of a State or Territory or political subdivision thereof, or the District of Columbia, issued on or after March 1, 1941, on a discount basis and payable without interest at a fixed maturity date not exceeding 1 year from date of issue, or (5) real property used in trade or business.

If bonds in registered or coupon form and corporate stocks become worthless during the year and are capital assets, the loss therefrom is considered a loss from the sales of capital assets; also, a nonbusiness debt which becomes totally worthless within the year is considered a loss from the sale of a capital asset held not more than 6 months; and certain distributions under employees' trust plans, as specified under section 165 of the Code, to the extent that the distributions exceed the amount contributed by the employee, are considered a gain from the sales of capital assets held more than 6 months.

For the purpose of computing net gain or loss from sales or ex

long-term capital gain and loss and provides different rules for the treatment of each. The distinction between short- and long-term gain and loss is based on the length of time that the asset is held before the sale or exchange. Short-term applies to the gain or loss resulting from the sale or exchange of a capital asset held for not more than 6 months, and 100 percent of the recognized gain or loss thereon is taken into account in computing net short-term capital gain or loss. Long-term applies to the gain or loss resulting from the sale or exchange of a capital asset held for more than 6 months, and 50 percent of the recognized gain or loss thereon is taken into account in computing net long-term capital gain or loss. The amounts reported as net short- and long-term capital gain or loss include the net shortand long-term capital gain and loss from partnerships and common trust funds.

Under certain circumstances, gain or loss from the sale of property which is not a capital asset may be treated as gain or loss from the sale of capital assets. Such gain or loss includes that from the sale of land and depreciable property used in business and from the cutting of timber or the disposal of timber under contract, if held more than 6 months. If the recognized gains upon sales or exchanges of such property plus the recognized gains from compulsory or involuntary conversion (through seizure, condemnation, destruction, fire, or theft) of property used in business and of capital assets held more than 6 months, exceed the recognized losses from such sales, exchanges, and conversions, then such gains and losses are considered as gains and losses from sales of capital assets held more than 6 months. However, if such gains do not exceed such losses, then such gains and losses are not considered as gains or losses from sales of capital assets; but each gain is fully reported and each loss, if allowable at all, is deductible in full.

The capital loss carry-over provision of the Code allows the amount of net capital loss of any income year to be carried forward as a shortterm capital loss in each of the five succeeding years to the extent that it exceeds any net capital gains of subsequent years intervening between the year in which the net capital loss is sustained and the year to which carried. If there are net capital losses carried over from more than 1 year, they are allowed in the order in which they arose. The net capital loss for any year, to be used as a capital loss carry-over, is the excess of (1) current year losses from sales of capital assets over (2) the sum of current year gains from sales of capital assets and the smaller of (a) $1,000 or (b) net income (adjusted gross income, if tax is determined from the tax table) computed without regard to gains or losses from sales of capital assets. For the purpose of computing the net capital loss carry-over, net capital gain for any year is the excess of (1) current year gains from sales of capital assets plus the smaller of (a) $1,000 or (b) net income (adjusted gross income, if tax is determined from the tax table) computed without regard to capital gains or losses over (2) current year losses from sales of capital

assets.

Capital loss carry-over reported on the 1948 returns is the combination of the net capital loss for 1947 and the remaining capital loss carry-overs from 1943-1946 not offset by the net capital gains of the