[Total assets classes and money figures in thousands of dollars]

For footnotes, see pp. 417-423.

[Total assets classes and money figures in thousands of dollars]

TABLE 18.-Taxable excess profits tax returns, 1940–1946:1 Number of returns, excess profits net income, excess profits credit, unused excess profits credit adjustment, adjusted excess profits net income, and excess profits tax

For

TABLE 19.-Consolidated 8 income tax returns, 1928-1948187 (excluding excessprofits tax returns filed under section 710 of the Internal Revenue Code) 88 all consolidated returns: Number of returns and number of subsidiaries; for consolidated returns with net income and consolidated returns with no net income: Number of returns, total compiled receipts, net income or deficit; also for consolidated returns with net income: Net operating loss deduction, and income tax

TABLE 20.-Taxable consolidated 86 excess profits tax returns, 1940-1946:1 Number of returns, number of subsidiaries, excess profits net income, excess profits credit, unused excess profits credit adjustment, adjusted excess profits net income, and excess profits tax

Footnotes for historical tables 11 to 20, pp. 351-416

1 Changes in the Federal tax laws affecting the comparability of data from income tax and profits tax returns of corporations are summarized on pages 452-476; textual discussion of comparability appears on pages 62-64.

2 The total number of returns shown includes returns of inactive corporations. For 1909-26 the number of returns of inactive corporations is not available, being included in the number of returns with no net income; for 1927-48 the number of returns of inactive corporations may be obtained by deducting the sum of the returns with net income and the returns with no net income from the total number of returns.

4 A comparison, for 1909-48 of the item tabulated for amount of "Net income" or "Deficit" and of the basis for classifying the returns into those "With net income" and "With no net income," follows:

Year

There follows a résumé of the kinds of returns 1909-12... included in the number of returns as tabulated

in tables 11-17 and 19.

1909-12. Returns of annual net income.

1913-17. Income tax returns.

1918. Income, war-profits, and excess-profits tax

returns.

1919-21. Income and excess-profits tax returns. 1922-32. Income tax returns.

1933-45. Income and (declared value) excess-profits tax returns. (The corporation excess profits tax returns which are required to be filed for 1940 through 1945 in addition to the income and declared value excessprofits tax returns are not included but

1913-19...

are tabulated separately in tables 18 and 1920-33
20.)

1946-48. Income tax returns.

For items included in "Total compiled receipts," see table 13. Prior to 1923, "Total compiled receipts" is not available by returns with net income and returns with no net income; the amount shown in table 11 for each year from 1916-22 is "Gross income,' which is smaller than "Total compiled receipts," as shown in table 13, by the amount of wholly taxexempt income.

The amounts of gross income for 1918-22 and total compiled receipts for 1923-24 are understated as a result of railroad and other public utility corpora tions frequently reporting only the net amount of income on the face of the return. It was inexpedient, because of the cost and time required, to inspect the numerous supporting schedules in such cases for the purpose of compiling gross income and general deductions. The understatement is estimated to be 5

1934-35-...

1936

1937-39.

1940-43....

Item tabulated for amount of "Net income" or "Deficit"

Column 1

Net income (for excise
tax computation).

Net income (for in-
come tax computa-
tion). Includes, for
1913, net income for
excise tax computa-
tion reported for
portion of taxable
year prior to Mar. 1,
on which date the
income tax became
effective.

Net income for cur-
rent year, i. e., be-
fore deduction of
prior year loss.
Net income subject
to income tax.
Net income for (de-
clared value) excess-
profits tax compu-
tation..

Net income for (de-
clared value) excess-
profits tax compu-
tation.

Net income for de-
clared value excess-
profits tax computa-
tion, adjusted by ex-
cluding net operat-
ing loss deduction.

billion dollars for 1918 and 1919, and nearly twice that 1944-45... Net income for de

amount for 1920 and 1921. There is no estimate as to the amount by which the gross income for 1922 or total compiled receipts for 1923 and 1924 is understated.

The gross income figure for 1918 through 1921 ex cludes dividends received from (1) domestic corpora tions (except those receiving a large percentage of their gross income from sources within a possession of the United States for 1921), (2) foreign corporations taxable by the United States on their net income, and (3) personal service corporations out of earnings

upon which a Federal income tax has been imposed. 1946-48---
The Revenue Act of 1918 provided that dividends
received on stock of corporations which were taxable
upon their net income were to be deducted from
gross income; but the 1918 return-which was printed
before the act was passed-excluded them from gross
income by providing for them to be reported with
other nontaxable income. Such dividends were in-
cluded in gross income on the 1919-21 returns but
were excluded in tabulation to produce a gross income
for 1919-21 which would be comparable to that re-
ported and tabulated for 1918. The aggregate amount
of these nontaxable dividends, including the amount
reported on returns with no net income, is shown
below for each year involved:

clared value excessprofits tax computation, adjusted by excluding net operating loss deduction, and adding Government interest subject to surtax only and excess of net long-term capital gain over net shortterm capital loss. Net income for current year, i. e., before net operating loss deduction.

• Prior to 1927, returns of inactive corporations were classified as returns with no net income.

On calendar year returns for 1933, the net loss for prior year (1932) is not deductible, therefore the net income tabulated for such returns is the net income subject to income tax; on returns with fiscal year ending in the period July through November, 1933, the net loss for 1932 is deductible, therefore the net income tabulated for these fiscal year returns is the current year net income, that is, before deduc tion of prior year loss (1932). The provision for deducting prior year loss was repealed by the Na tional Industrial Recovery Act, effective January 1, 1933.

This amount, which is the net income less interest on Liberty bonds, etc., is comparable with net income subject to income tax for prior years.

The only difference between the two items of