Footnotes for tables 1 through 14, individual returns, pages 35-131-Continued (Facsimiles of return forms, to which references are made, appear on pp. 347-372) loss resulting from the combined net short- and long-term capital gain and loss and the allowable carryover. (See note 17.) * Short-term applies to gains and losses from sales or exchanges of capital assets held 6 months or less and 100 percent of the recognized gain or loss thereon is taken into account in computing net short-term capital gain or loss. The amount reported is a combination of short-term gains and losses for the year, together with such gains and losses received through partnerships and common trust funds. 45 Long-term applies to gains and losses from the sales and exchanges of capital assets held 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 amount reported includes such gain or loss received through partnerships and common trust funds. 49 Capital loss carryover reported on the 1950 returns is a combination of the 1949 net capital loss and the remaining capital loss carryovers from 1945-48, not offset by net capital gains of the succeeding years 1946-49. A net capital loss of any year, to be used as a capital loss carryover, is the excess of current year capital losses over the sum of (1) current year capital gains and (2) the smaller of $1,000 or current year net income (adjusted gross income, if tax is determined from tax table) computed without regard to capital gains and losses. A net capital loss may be carried forward as a shortterm capital loss for 5 succeeding years to the extent not previously eliminated. 50 Returns with net gain from sales of capital assets are returns, Form 1040, showing a capital gain in adjusted gross income, resulting from the combination of net short- and long-term capital gain and loss and the allowable carryover. (See note 17.) 51 This excess is the approximate amount subject to the 50 percent alternative tax rate; it is the excess of the net long-term capital gain over the net short-term capital loss (before carryover) tabulated in this table. This arbitrary method overstates the excess in cases where a carryover was combined with a short-term loss to determine the excess long-term gain, or where a carryover exceeded the short-term gain resulting in a short-term loss which was used to de termine the excess long-term gain, or where there was no short-term gain or loss but a carryover was used to determine the excess long-term gain. 52 Returns from Alaska are filed in, and the data tabulated with, Washington. TAXABLE FIDUCIARY INCOME TAX RETURNS FIDUCIARY RETURNS INCLUDED Fiduciary income tax returns, Form 1041, for which data are tabulated in this report are returns for the calendar year 1950, a fiscal year ending within the period July 1950 through June 1951, and a part year with the greater part of the accounting period in 1950. However, only the taxable returns are used; that is, returns with income which, after authorized expenses and the deduction for amount distributable to beneficiaries, is in excess of the allowable exemption. Taxable fiduciary returns include returns for the income of estates and the income of trusts. Tentative returns are not used and amended returns are used only when the original returns are excluded. Statistical data are completely tabulated from each taxable fiduciary return, prior to official audit. INCOME TAX PROVISIONS WITH RESPECT TO FIDUCIARY INCOME Although only taxable fiduciary returns are included in Statistics of Income, nevertheless, every fiduciary, or at least one of joint fiduciaries, is required to file an income tax return on Form 1041 for every estate for which he acts, if the gross income of the estate is $600 or more or if any beneficiary is a nonresident alien, and for every trust for which he acts, if the net income of the trust is $100 or more or if the gross income is $600 or more regardless of the amount of net income, or if any beneficiary is a nonresident alien. Supplement E of the Internal Revenue Code provides that the taxes imposed on the income of individuals by chapter 1 shall be applicable to the income of estates and to the income from property held in trust. The rates of tax, the provisions respecting gross income to be reported, the deductions with certain exceptions, and the tax credits provided for the income of individuals apply also to the income of estates and trusts. The gross income to be reported by the fiduciary includes the entire taxable income of the estate or trust even though a portion is distributable to beneficiaries. In general, the net income of an estate or trust is computed in the same manner and on the same basis as the net income of an individual, except that, in lieu of the deduction for contributions to charitable, religious, scientific, literary, and educational organizations allowed to individuals, there is allowed as a deduction, without limitation, any part of the fiduciary gross income which is set aside to be used exclusively for such purposes; and there is allowed, as an additional deduction, the amount of income which is to be distributed currently or becomes payable to beneficiaries, as well as amounts which in the discretion of the fiduciary may be distributed to the beneficiary or accumulated, if such amounts are reported in the income of the beneficiary. Exemption in the form of a credit against net income taxable to fiduciary, for both normal tax and surtax, is $600 for an estate and $100 for a trust. Also allowable against net income, for purpose - of normal tax only, is a credit for the amount of partially tax-exempt |