nor adjusted gross income for 1944-1948, so that they are comparable with items for the years 1938-1941.

A summary of the provisions of the various revenue acts, pertaining to the treatment of gains and losses from sales of capital assets is presented in table D, pages 444-445.

CAPITAL LOSS CARRY-OVER

In connection with the historical data for capital gains and losses, a résumé of the capital loss carry-over provisions and the method of tabulating the carry-over for Statistics of Income will be of interest. The amount of capital loss carry-over tabulated from individual returns and from taxable fiduciary returns for the income years 1939-1948 are shown below.

The 1938 act provides that the disallowed net short-term capital loss sustained in 1938 and subsequent years in an amount not in excess of the net income shall be carried to the succeeding year and treated as a short-term capital loss; however, the excess of such shortterm capital loss over the net short-term capital gain of such succeeding year is not deductible. Under this act, no benefit is derived from the carry-over provision unless there is a net short-term capital gain in the succeeding year against which the carry-over can be applied.

Capital loss carry-over is tabulated from returns with net gain from sales of capital assets for the income years 1939-1942 and from returns with a net loss from such sales for the income year 1942; however, the tabulated amount of carry-over is only the amount actually applied against the net short-term capital gain, that portion of the carry-over in excess of the net short-term capital gain having been disregarded. Thus the carry-over tabulated for these years is not, in all cases, the entire amount of carry-over reported on the return and, therefore, does not represent the entire amount of short-term capital loss sustained by the taxpayers and available for the carry-over. The tabulated carry-over is a net short-term capital loss carried over from the first preceding year and applied against the net short-term capital gain as provided under the 1938 act and, accordingly, is limited to the net income of the year in which the loss arose as well as to the net short-term capital gain of the year in which the carry-over is used.

The 1942 act provides that for any income year beginning after December 31, 1941, the "Net capital loss," that is, the disallowed capital loss resulting from the current year sales of capital assets, shall be a short-term capital loss in each of five succeeding years to the extent that such loss exceeds the total of any "Net capital gains" of any years intervening between the year in which the loss arose and such succeeding year. Under this act, the net capital loss for any year is the excess of (a) the current year capital losses (both shortand long-term) over (b) the sum of current year capital gains (both short- and long-term) and the smaller of either $1,000 or net income (or for 1944 and thereafter adjusted gross income if tax is determined from tax table) computed without regard to capital gains and losses. Thus the disallowed loss to be carried forward includes both shortand long-term capital losses in contrast with the carry-over under the previous act wherein the carry-over was composed of net short

tion from total income. Furthermore, the carry-over under the 1942 act is not limited to the net income (or for 1944 and thereafter adjusted gross income if tax is determined from tax table), and when carried into each of five succeeding years as a short-term capital loss is applied against the "Net capital gain," to the extent not previously eliminated. The net capital gain, against which the carry-over is applied, means the excess of (a) the sum of current year capital gains (both shortand long-term) and the smaller of either $1,000 or net income (or for 1944 and thereafter adjusted gross income if tax is determined from tax table) computed without regard to capital gains and losses, over (b) the current year capital losses (both short- and long-term). Under these provisions, the carry-over is, in effect, applied against either or both net short- and long-term capital gains and against other income not exceeding $1,000, in each of five succeeding years unless eliminated in the interim.

The capital loss carry-over is tabulated from all returns with net gain or with net loss from sales of capital assets for the income years 1943-1948. The amount is the entire carry-over reported by the taxpayer whether or not it is offset by capital gains and/or other income. The carry-over reported on the 1943 returns is the net capital loss sustained in 1942; the carry-over reported on the 1944 returns is the net capital loss sustained in 1943 together with the remaining disallowed capital loss of 1942 not eliminated by the net capital gain of 1943; the carry-over reported on the 1945 returns is the net capital loss for 1944 together with the remaining disallowed capital loss of 1942 and of 1943 not eliminated by net capital gain of subsequent years, 1943 and 1944; and the carry-over reported on the 1946 and the 1947 returns is similarly accumulated with the net.capital loss sustained in 1945 and 1946, respectively. On the 1948 returns, the carry-over is the capital net loss sustained in 1947 together with the remaining capital loss carry-over from 1943-1946 not offset by net capital gains of the succeeding years 1944-1947. Because of this amassment, a carry-over or any portion thereof not previously absorbed within its 5-year period is repeatedly reported along with carry-overs from subsequent years.

The capital loss carry-over tabulated from returns with a net gain from sales of capital assets for 1943-1948 is entirely eliminated by current year capital gains. The capital loss carry-over tabulated from returns with a net loss from sales of capital assets in this period is in some cases partly eliminated and in some others wholly eliminated by current year capital gain and/or the allowable deduction not exceeding $1,000. In cases where the current year capital loss exceeds the $1,000 deduction from income, no part of the carry-over is eliminated. When the carry-over consists of capital losses incurred in more than 1 year, the losses are eliminated in the order in which the

Capital loss carry-over tabulated from individual and taxable fiduciary returns for 1939-1943 and from individual returns for 1944-1948, by returns with net gain or with net loss from sales of capital assets and by returns with net income or adjusted gross income and returns with no net income or no adjusted gross income

Capital loss carry-over tabulated from taxable fiduciary returns for 1939-1948, by returns with net gain or with net loss from sales of capital assets and by returns with net income or with no net income

1947.

7,948

11, 446

11, 446

PARTNERSHIP RETURNS OF INCOME, 1917-1948

Partnership returns of income, except for the war excess-profits tax of 1917, are not subject to direct assessments of Federal income tax. However, every domestic partnership and every foreign partnership doing business in the United States or having an office or place of business therein is required to file a return of income on Form 1065 (facsimile on pages 490-497). "The term 'partnership' includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this title, a trust or estate or a corporation (section 3797(a)(2), Internal Revenue Code). The distributive share of net profit or net loss of the partnership (whether distributed or not) is reported on the income tax return of each partner according to his proportionate share, and the profit or loss thus reported is tabulated elsewhere in this report insofar as it is reported on individual and taxable fiduciary returns for 1948, as a source of income or loss comprising adjusted gross income for individual returns, Form 1040, and as a source of income or loss comprising total income for taxable fiduciary returns, Form 1041.

* * *""

Significant data tabulated from partnership returns of income, Form 1065, for 1947, are available in a press release which may be obtained upon request to the Director, Statistics Division, Internal Revenue Service, Washington 25, D. C.

The number of partnership returns, Form 1065, filed for the income years 1917 through 1948, shown below as reported by the collectors of internal revenue, include calendar year returns, fiscal and part year returns filed during the succeeding calendar year regardless of month in which the income year ended, and delinquent returns.

SOURCE BOOK OF STATISTICS OF INCOME

The Source Book is a series of unpublished volumes containing comprehensive compilations of data which supplement the published reports, "Statistics of Income." The Source Book is maintained in the Statistics Division, Internal Revenue Service, and is available for research purposes to officials of the Federal and State Governments

presentation of a written request addressed to the Commissioner of Internal Revenue.

The following data from individual income tax returns for 1927-1942 (except Form 1040A for 1941-1942) are classified by States and Territories, by taxable and nontaxable returns, and by net income classes: The sources of income and deductions (as published for each year in the Statistics of Income), total income, total deductions, net income, personal exemption and credit for dependents (combined for 1927-1932 and shown separately thereafter), earned income credit for 1934-1942, net loss for prior year 1927-1932, normal tax, surtax, 12% percent tax on capital net gain for 1927-1933, 12% percent tax credit for capital net loss for 1927-1933, tax credit for earned income for 1927-1931, alternative tax for 1938-1942, and total tax.

The number of returns with net income and the amount of net income for 1927-1942, personal exemption for 1937-1942, credit for dependents for 1937-1942, and total tax for 1941-1942 (except Form 1040A for 1941-1942) are classified by States and Territories, by taxable and nontaxable returns, by net income classes, and by sex and family relationship.

The amount of Government obligations owned and the wholly and partially tax-exempt interest received thereon as reported on individual returns with net income of $5,000 and over for 1932-1940 are classified by States and Territories and by net income classes.

For 1941, the Source Book contains no data for individual returns, Form 1040A, other than that published in the report. For 1942, the Source Book shows for Form 1040A the number of returns, amount of salaries, other income (dividends, interest, and annuities in one sum), gross income, personal exemption, credit for dependents, earned income credit, and optional tax classified by gross income classes, by taxable and nontaxable returns, and by sex and relationship, for States and Territories.

The sampling technique employed for estimating data for 1943 and subsequent years does not permit tabulation of data by income classes and by sex and family relationship, for the States and Territories.