1 Income subject to surtax, for 1913-33 is net income, for 1934-43 is net income less personal exemption and credit for dependents, for 1944-45 is net income less surtax exemptions, and for 1946-48 is net income less exemptions."

For 1948, on joint return of husband and wife, the tax is computed on one-half of the net income less exemptions and the result multiplied by two.

Prior to 1934, if taxpayer elects to pay the alternative tax, net income subject to surtax is without consideration of capital gains and losses; for 1938-41, if the alternative tax is paid, the net income subject to surtax is without consideration of net long-term capital gains or losses; and for 1942 and thereafter without consideration of net long-term capital gain or the excess of net long-term capital gain over net short-term capital loss.

The surtax rate is that for the calendar year. In the case of a rate change during a fiscal year ending in the period 1918-33, the total tax is prorated on the basis of the number of months in each year (total tax is prorated for fiscal years ending in 1919, 1922, 1924, 1925, 1929, 1930, and 1932). For fiscal years beginning in the period Jan. 1, 1934 through July 1, 1941, the rate is that for the year in which the taxable year begins. For fiscal years beginning in 1941 and ending in 1942 after June 30, a tentative tax is computed under the law in effect for each taxable year and the two tentative taxes are then prorated according to the number of days before July 1, 1942, and after June 30, 1942. For fiscal years beginning in 1943 and ending in 1944, the tentative tax method is also employed and the tentative taxes are prorated according to the number of days before Jan. 1, 1944, and the number of days after Dec. 31, 1943; for fiscal years beginning in 1945

or 1947 and ending in 1946 or 1948, respectively, the tax is similarly prorated.

The surtax rates for 1936 and subsequent years are not ar plicable to all nonresident alien individuals (see table A, note 20, p. 431-432).

For 1917, the rates are a combination of the additional For 1913-17, surtax was called "additional tax." tax rates provided by the Revenue Acts of 1916 and 1917.

4 Tax, for 1923, computed at these rates, was reduced 25 percent by credit or refund under section 1200 (a), Revenue Act of 1924.

For 1940, there is superimposed upon the total tax, the defense tax, which is 10 percent of the total tax. The defense tax is computed on the total tax amount not more than 10 percent of the net income in before applying any credits, and is limited to an excess of the total tax computed without regard to the defense tax.

The combined normal tax and surtax, before tax credits, is limited to 90 percent of net income.

Tentative surtax. For 1946 and 1947, the tax thus computed is reduced by 5 percent thereof and the combined normal tax and surtax (after reduction but before tax credits) is limited to 85.5 percent of net income. For 1948, the combined tentative normal tax and surtax is reduced by 17 percent of the first $400, plus 12 percent of the next $99,600, and lus 9.75 percent of the excess over $100,000, and the combined normal tax and surtax (after reduction but before tax credits) is limited to 77 percent of the net income.