STATISTICS OF INCOME . aa 1961-62

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STATISTICS OF INCOME . a a 1961- 62
with accounting periods ended
July 1961 - June 1962
U. S. TREASURY DEPARTMENT - INTERNAL REVENUE SERVICE
Statistics of Income / 1961-62
Corporation
INCOME TAX
RETURNS
with accounting
periods ended
July 1961-June 1962
Prepared under the direction of the
Commissioner of Internal Revenue
by the Statistics Division
U. S. TREASURY DEPARTMENT / Intrrnal Revenite Strvice e Publication No. 16 (7-64)'
INTERNAL REVENUE SERVICE
BERTRAND M. HARDING, Acting Commissioner
WILLIAM H. SMITH, Assistant Commissioner (Planning and Research)
Statistics Division:
VITO NATRELLA, Director
JAMESM. JARRETT, Assistant Director
THOMAS F. McHUGH, Chief, Income, Finance, andWealth Branch
ROBERT A. WILSON, Supervisory Statistician
UNITED-STATES
GOVERNMENT PRINTINGOFFICE
WASHINGTON: 1964
For sale bythe Superintendent ofDocuments, U.S.Government Printing Office, Washington, D.C., 20402 - Price $2.00 (Paper Cover)
LETTER OF TRANSMITTAL
Treasury Department,
Office of Commissioner of Internal Revenue,
Washington, D. C., July 20, 1964.
Dear Mr. Secretary:
I am transmitting the Statistics ofIncome-1961-62, Corporation IncomeTax
Returns with accountingperiods ended July 1961 through June 1962. This report
was prepared in partial fulfillment of the requirements of section 6108 of the
Internal Revenue Code of1954whichprovides that statistics be published annually
with respect to the operation of the income tax laws.
As is customary, this report presents awidevariety of benchmark statistics
on corporations, with information about their assets, liabilities, receipts, deduc-
tions, profits, income tax liability, and distributions tostockholders. These facts
are presented for various industry and size groupings. A number of special
topics are included, suchas the methods usedto compute the depreciation claimed
for tax purposes andthe aggregate net gain or loss on sales of certain business
property as determined under Code section 1231.
A supplemental report for1961-62, due tobereleased in the fall of 1964, will
provide information on WesternHemispheretrade corporations andon the foreign
tax credit. Statistics on the foreign tax credit will include.the income remitted
from foreign sources and the foreign taxes paid on it.
Acting Commissioner ofInternal Rev,
Hon. Douglas Dillon,
Secretary ofthe Treasury.
III
CONTENTS
Page
1. Corporation income tax returns, July 1961-June 1962:
Guide to tables by subject ....................................................... 2
Period covered and returns included ........................................ 3
Summary of 1961-62 .............................................................. 3
Statistics classified by size of business receipts and size of total
assets ..............................................................................
Sales or exchanges of section 1231 property ..............................
Ownership of corporate stock ..................................................
Depreciation methods.............................................................
Ratio classifications ..............................................................
Changes in law:
Real estate investment trusts ............................................... 7
Percentage depletion .......................................................... 8
Life insurance companies .................................................... 8
Foreign tax credit .............................................................. 9
Statistical population .............................................................. 10
Description of the sample and limitations of the data ................... 11
Explanation of terms ............................................................. 15
2. Tables compiled from corporation income tax returns, July 1961-
June 1962.......................................................................... 31
3. Methods used in computing depreciation, 1961-62 and 1960-61 .......... 261
4. Corporation income tax returns, historical summary, 1952-53through
1961-62:
Historical comparability of terms ......................................... 273
Historical tables ................................................................. 275
5. Source Book of Statistics of Income, 1926-27 through 1951-52 and
1953-54 through 1961-62 ..................................................... 285
6. Corporation income tax return forms, 1961 ................................... 289
Index .......................................................................................... 359
V
1. Corporation Income
Tax Returns,
July 1961 - June 1962
r
GUIDE TO TABLES ............ BY SUBJECT
Table Page
Industry measurement: No. No.
Minor industry-receipts, net income, income tax, and distributions to stockholders ................ 1 34
Major industry and asset size-balance sheets and income statements ................................... 2 40
Major industry and business receipts size-selected income and balance sheet items ...........*... 5 166
Size distributions:
Total assets:
Major industry-balance sheets and income statements ................................................. 2 40
Industrial division-receipts, total assets, and net income, by size of business
receipts .............................................................................................................
3 144
Net income:
Industrial division-receipts, net income, income tax, and distributions to stock-
holders ..............................................................................................................
4 162
Regular and alternative tax liability-net income, income subject to tax, and income
tax ................................................ I................................................................... 8 191
Business receipts:
Major industry-selected income and balance sheet items ........ 5 166
Industrial division-receipts, total assets, and net income,'~y' 'siz-e...o'f''t'o*t'a* s**s*e'*t's' ............ 3 144
Income taxed at normal tax and surtax rates: Net income, income subject to tax by type of tax,
income tax, and foreign tax credit, for nonconsolidated, consolidated, insurance, and resident
foreign corporation returns ......................................................................................... 9 192
Income tax: Total assets, receipts, income tax, foreign tax credit, and distributions to stock-
holders, by industrial division ..................................................................................... 10 198
Tax liability by type:
Regular and alternative tax, by size of net income .............................................................. 8 191
Income taxed at normal tax and surtax rates: net income, income subject to tax by type of tax,
income tax, and foreign tax credit, for nonconsolidated, consolidated, insurance, and resident
foreign corporation returns ......................................................................................... 9 192
Taxpayments: On declarations of estimated tax or with requests for extension of time in which to
file, by month accounting period ended ................................................................................ 11, 12 202,203
Ratios from returns:
Percent of net worth to total assets-total assets, receipts, net income, interest paid, and
distributions to stockholders, by size of total assets and industrial division ......................... 16 212
Percent of inventory change-receipts, inventories, net income, and income tax, by size of
business receipts, manufacturing and trade corporations ................................................. 17 224
Inventories:
Percent of inventory change-receipts, inventories, net income, and income tax, by size of
business receipts, manufacturing and trade corporations .................................................. 17 224
Beginning and ending inventories, business receipts, total assets, net income and income tax,
by month accounting pe'riod ended ................................................................................. 18 228
Region and district of filing:
Number of returns, by size of total assets......................................................................... 15 208
Number of returns, net income, and income tax.................................................................. 14 207
Corporations owned 50 percent or more byany one stockholder by size of total assets .............. 13 204
Accounting periods:
Calendar and noncalendar periods-receipts, net income, income tax, bysize ofnet income or
deficit ..................................................................................................................... 6 189
Net income, income subject to tax, income tax, and distributions to stockholders, by month
accounting period ended .............................................................................................. 7 190
Payments on declarations of estimated tax orwithrequests for extension of time in whichto file,
by month accounting period ended ................................................................................. 11, 12 202,203
Beginning and ending inventories, business receipts, total assets, net income and income tax,
by month accounting period ended ................................................................................. 18 228
Depreciation:
Method of computation, by size of total assets, by industrial division, 1961-62 and
1960-61 ................................................................................................................... 26 262
Method of computation, by minor industrial group, 1960-61................................................... 27 264
Returns with net income: Balance sheet and income statements, by major industrial groups, or by
size of total assets .......................................................................................................... 21, 22 246,254
Consolidated returns: Balance sheet and income statements, by industrial division ........................ 23, 24 256,257
Stock ownership: Returns of corporations indicating 50 percent or more of their stock owned by any
one stockholder by region of filing and size of total assets ...................................................... 13 204
Small business corporation returns, Form 1120-S .................................................................... 25 258
Returns with sales or exchanges of section 1231 property: Major industrial group or size of total
assets ............................................................................................................................ 19, 20 242,245
Historical statistics, 1952-53 through 1961-62 ......................................................................... 28-33 275-282
2
CORPORATION INCOME TAX RETURNS WITH ACCOUNTING PERIODS
ENDED JULY 1961 THROUGH JUNE 1962
PERIOD COVERED AND RETURNS INCLUDED
Chart 2.-PERCENT OF RETURNS BY CALENDAR AND NONCALENDAR
Income and financial statistics for 1961-62 presented YEAR STATUS, 1961-62-
in this report were derived from a sample of the more
NONCALENDARYEAR RETURNS CALENDARYEARRETURNS
than 1,240,000 corporation income tax and information Percent Percent
returns with accounting periods ended July 1961 through 100 80 60 40 20 0 20 40 60 80 100
June 1962.
Active corporations filed almost 1,200,000 returns,
including 106,000 information returns of small business
corporations electing to be taxed through their share-
holders. Active corporation returns were the basis for
all financial statistics presented in this report.
Inactive corporation returns were those showing no
income or deductions, which were filed because do-
mestic and resident foreign corporations in existence at
any time during the year, unless they were expressly
exempt, were required to file a return. Financial data
Trade Commission and the Securities and Exchange
from inactive corporation returns, as well as from re-
Commission and published in the Quarterly Financial
turns filed by the few unincorporated businesses which
Reportfor Manufacturing Corporations.
chose to be taxed as corporations, were excluded from
all tables.
Corporation statistics for 1961-62 were based not SUMMARY OF 1961-62
only on returnswithaccountingperiodscoincidingwiththe
calendar year 1961, but also on returns with non-
The number of returns filed for 1961-62 increased by
calendar year accounting periods. Chart 1 illustrates
about 50,000 over the previous year. This increase was
the numerous accounting periods used for this report
about the same as the rise in the number of returns with
and chart 2 shows some information about the use of
net income.
calendar year and noncalendar year accountingperiods.
The 715,589 returns with net income were greater
in number than any reported in previous years. Like-
wise, the benchmark of $52,401,331,000 for net income
Chart l.-ACCOUNTING PERIODS OF RETURNS IN THIS REPORT
reported on these returns exceeded all previously re-
I I ported amounts. While the number of returns withoutnet
income remained about the same as in 1960-61, the
deficit of $6,507,431,000 represented a slight decline.
Table A is a summary showing the increase in
receipts for 1961-62 over 1960-61 and its relationship
.--~-.-__-1
to total business deductions, net profit, and income tax.
Table A.-ACTIVE CORPORATION RETURNS: ~RECEIPTS, DEDUCTIONS, TAX,
AND PROFITS
Accounting periods ended-
Item July 1961- July 1960-
Ll 1_1 I I I I I I June 1962 1 June 1961
I 1960 1-19C6.1-1d.,y--1-1962 I (Billi- d.11...)
Total compiled receipts................................... 873.2 849.1
Returns were due to be filed within two andone-half Business receipts....................................... 823.9 802.8
Other receipts.......................................... 49.2 46.3
months after the close of the corporate accounting
period. However, many companies were granted exten- Total compiled deductions................................. 826.1 804.6
Cost of sales and operatio............................. 586.6 577.0
sions of time in which to file, sothat some of the returns Other deductions........................................ 239.6 22?.6
for the accounting periods covered by this report were Compiled net profit'...................................... 47.0 44.5
not filed until early 1963 andweretherefore not available Income t~................................................ 22.2 21.9
Compiled net profit less income tax'...................... 24.8 22.6
for statistical processing until the spring of 1963.
More recent financial information, for manufacturing by'Isnmacllludbeussinneetssprocfoirtpoorfati0o.n6sbiflolriwohnicfohran196e1l-e6c2tioanndwa0s.4mabdiellitoonbefortax1e9d60t-h6r1ourgehported
corporations only, is estimated quarterly by the Federal shaNOrTeEh:oldDeertsaialndmawyerenotthearddefotroetontotalsubbejceacutsetoofthreoucnodirnpgo.ration income tax.
3
4 CORPORATION INCOME TAX RETURNS, JULY 1961-JUNE 1962
Table B. -ACTIVE CORPORATION RETURNS: NUMBER OF RETURNS, TOTAL ASSETS, TOTAL COMPILED RECEIPTS, AND NET INCOME, BY-SIZE OF TOTAL ASSETS
Accounting periods ended-
July 1961-June 1962 July1960-June 1961
Total Net income Total Net income
,9ize of total asset; Nurmebteurrnsof Tot(a7l7as-sdets cr(oeTmcpehii-lpetdds (d7(e7lef.s.ic.s-idt) Nurmebteurrnsof To(t7al7-a-sdsets cr(oeTmchpeii-lp-etdds d(e(rflhie-sc.si-td)
&11...) d.11... d.11-) d.11-) dil... d.11...
(2) (3) (4) (5) (6) (7) (8)
Total............................................................... 1,190,286 1,289,516,071 873,177,644 45,893,900 1,140,574 1,206,662,112 849,131,931) 43,5C5,174
Z1e1125'rC1,o'GuC,Cn'd)-G0Ce)0oCr,ot$~2,.dnd5ed.c,re,.0r.0.C.$2..C5,..(..o,c.,.lc..lx..~).c..*...................*.........................-.....*.........................................................................................*............................................................*...*......................... 21228470362769,,,,,286008053505397 133648,,,,147091522462,,,,343801745779 371101704,,,,,305743~51867C85,,,,,942637838921584 1,132135608977896,,,,,481166641C9074I 211248692-C9095,,,,,103111414367625 133266,,,,~91397494402,,,,299289295918- 211668490,,,,,19203528461C247,6,,,,79-321~76:,31,~', 1,122'34156792089,,,,,599268950225118
152512,,,05.1C1,C.,0((,~(A1,.(-_d'euc'n,ddeerr1,125I,C,C(0)C00,0.0'.).o.C............................................................................................................................................................................................................................................. 1153118448,,,,,509259669657534 345558C309,,,,,928082482656924,,,,,353058179073079 6467475016,,,,,579971960625668,,,,,850355434000597 11211,,,,,360895032063816,,,,,5475079519736C1 IC53154438,,,,,191827971813C40 3354586287,,,,638620211226781,,,,,68068887979539C 6674441125,,,,,66233682240C290,,,,,237222616:f8t3~,~3 11211,,,,,72308C282573333,,,,,9198C51303C7361)
1,2512GC05,'0'00),,0(0~)G0ZC0,,0,1000001C0CCuu,nnuoIddnrdeedrrremror11e"$15(2,.,5.C.,.u..o..0.0...0........................................................................................................................................................................................................................ 621,,1221863002014580 152997878944,,,,,493315212568295,,,,,307737146456862 24544602075,,,,,880121843C40265,,,,,742280588739001 212234,,,,,941990307418744,,,,,008373081913303 521,,,11758046609567 15158'797299,2,,,4,23789994156C4,9,,,,815063989847723 23544632134,,,,,27'30/894C11208O,,,,,61381132530744, 212234,,,,,39060(218t',63874,,,,,418535098238843
Deficit.
Table C. -ACTIVE CORPORATION RETURNS: NUMBER OF RETURNS, BUSINESS RECEIPTS, AND NET INCOME OF MANUFACTURING AND NONMANUFACTURING CORPORATIONS,
BY SIZE OF TOTAL ASSETS, 1961-62 AND 1960-61
Total Manufacturing corporations N-unufacturing carp-rations
it-- 'ne size of t1tcl -seto 1961-62 1960-61 dInf,ccrre~aassee (o-r) 1961-62 1960-61 Ide.c,rreeaas.ee(or 1961-62 1960-61 dIcnccrreaaasae or
(2) (3) (4) (5) (6) (9)
N-1-
A~tive -rporutlunc, total,............................ 1, 90,286 1,140,574 49,712 1'73,558 165,862 7,696 1,016,728 974,712 42,016
With t"tol a"'tr of-
$100 ini~. or m.r..................................... 1,428 1,333 95 316 304 12 1,IL2 1'0~9 83
U.d1r $100 .1111.~....................................... 1, 8u'pm 1,139,241 49,617 173,242 163,558 7,634 1,015,616 973,6~3 41,933
(VIII-d.11...)
Buoin-; re-ipl,~i:
A,-ti,, t.t,L.................................. 823,943 802,791 21,152 369,911 364,612 5,299 4,4,032 438,1-,9 1,,853
WitfL total of-
$U1n0d0- i$L1l0i0..mioLrLime.ur.~......................................................................... 258430,,814012 2~72h6,,344456 137,,64~966 210618,,449201 1169-77,,416502 41,,023609 131358,,462102 130298,,19~1836 69,,2622'6/
Net 1.1-1 (1c13S deCilit):
Active curporatiozo, totaL.................................. 45,894 43,505 2,389 22,494 22,14~ 349 23,400 21,31.0 2,040
Wit$Uhn1d0e0troota$il1l0l0_4~-'iUlo;lrio-mn"orr.-.......................................................................... 2168,,991795 2157,,698169 11,,213536 183,,860859 138,,560378 118627 1130,,213700 129,'Y1o~)a 1,908591
Table D. -CORPORATION RETURNS: NUMBER, NET INCOME OR DEFICIT, The number of returns, total assets, receipts, and rret
INCOME SUBJECT TO TAX, AND TAX income are compared for the two periods by size of
A~oun-tinngddp--iods dIenccrreeaass,,e (o-)r total assets in table B. Table C shows a comparison of
Ite. receipts andnet income for large and small manufactur-
JJ~11l~-y 11496612- JJllu~r~e11996601- Na-mboeurntor ~_ c'nt ing and nonmanufacturing corporations. Table D pro-
vides some information about the changes in corporate
(1) (2) (3) 4~
net income and the resulting changes in income subject
Number of returns, total.............. 1,240,759 1,187,642 3,117 .5
Active corporations, total.......... 1,190,286 1,140,574 9,712, .4 to tax between 1961-62 and 1960-61. Charts 3 and4
,~F.rm 11112z0o-rEp.o.r.a.t.i.o.n.s.,..t.o.t.a.l................. 10560,,044738 907-,102618 5,,84207~ 7..52 show receipts and net income for 1961-62 by industrial
aFocrtmive 20............................ 958 l'o7g 120 11.1 division.
Active corporations:
Returns with net is--
Number of returns, total.......... '715,589 670,239 5,350 .8
N,,t incom,, total.....th-s. dol., 5;,401,331 50,382,345 ,018,98f, .C STATISTICS CLASSIFIED BY SIZE OF BUSINESS
Rct-- t~.cr ti- F~- ',12C'-S:
Nu.13- i r,i--............... c47,772 614,llf, 3,o56 .5 RECEIPTS AND SIZE OF TOTAL ASSETS
N1e-toil-le-1m1~1l".c.c.f...*......ih,)!,-,;. J'l. 51,496,954 49,703,869 ,793,085 .u
intax...................r"'u, . dol. 147,937,egl 47,246,572 91,119 .5 In table 3 of this report, statistics are presented
.A.-",uc,,rt 1,f rct~roo............. 553,628 527,465 6,163 .0 which show the relationship between the size of business
............. '22,188,057 '21,866,299 21,756 .5
Form 1120-S: receipts and the size of total assets of corporations.
N-t- t eti-o............... 67,817 56,123 1,694 D.8 The number of returns, receipts, total assets, and net
Net i--...........th.us. lol. 904,377 678,476 25,901 3.3
R,t-.. without net J.,..,: income are grouped by size of receipts within asset
NDuemfbiecrit,ofto-ttal-...,....t.o.tatlho.u.s.....d.o.l.... 6,540774,,46391? 6,847770,,137315 369,,734602 5..49 size classes and shown for each industrial division.
~._ 1"U-"]: Some apparent anomalies in the statistics may be
ND'ufmibe,rito.f..r.e.t.u.r.n.s.......t.h.o.a.s.....d.e.l.... 1 33398,,923301 2954,,909978 43,,913333 124..81 attributable to reporting requirements. For example, a
newly incorporated firm may have filed an initial return
'I.cl,dc. -.-is -ported onreturns without net income. Income subject to tax on
such returns was $9,609,00,D for 1961-62, and $6,020,000 for 1960-(51. Income tax on covering less than the normal 12-month accounting
returns without net income was $1,286,000 for 1961-62 and$393,000 for 1960-61. Tax
on icturns without net income occurs occa- of special provisions of the internal period and as a result the total assets shown on the
Ft-en" C~Ide 'Ipplilll'le t, Life and csl-tai,, -t,al insurance aucinco;~es.
CORPORATION INCOME TAX RETURNS, JULY 1961-JUNE 1962 5
capital asset genus which under the Code included most
Chart3.-TOTAL RECEIPTS, BY INDUSTRIAL DIVISION, 1961-62 other types of property except inventories andproperty
held primarily for sale in the ordinary course of busi-
Finance,insurance,& real estate Services3-0%.
Public utilities Mining1.4% ness.
Construction As shown in the Explanation of Terms, a maximum
7.8% 4.3% Agriculture0.6% tax rate of 25 percent was imposed on gains from the
sale of capital assets held six months or more, and
losses from the sale of capital assets could be deducted
Trade in computing taxable income only to the extent of capital
31.0% Manufacturing gains. Depreciable and real property used for business
43.2%
purposes were treated separately from capital assets
in order to permit full deduction of losses from their
disposition. Over the years, gains and losses from
disposition of several other specific types of property
were grouped with those from depreciable and real
property under the provisions of Code section 1231.
IPTS$873, 177,644,000
Under this section gains and losses from disposal of-
INUMM
1. Depreciable and real property used in the trade
or business and held for more than six months (and not
Chart4.-NET INCOME, BY INDUSTRIAL DIVISION, 1961-62
includible in inventory or held for sale in the ordinary
Semces Mining 1.9% course of business),
1-9%7 Construction1.1%
Agriculture0.3% 2. Timber cut by the taxpayer during the year if
owned or held under contract to cut for six months
before the beginning of the taxable year, and if election
was made under section 631,
3. Coal or timber held for more than six months
if under the disposal contract the owner retained an
economic interest in such property and if election
was made under section 631,
4. Unharvested crops disposed of with land used in
the trade or business and held more than six months,
S. Livestock, except poultry, held for draft, breed-
ing, or dairy purposes and held for 12 months or more,
and
return (which was anend-of-year balance sheet amount)
may have been high relative to receipts for the short 6. Involuntary or compulsory conversion of the
accounting period. Conversely, for corporations which above property or of capital assets were aggregated.
liquidated during their taxable year, total assets may If the aggregated result was a net gain it was treated
have been zero or very small so that receipts for the as a long-term capital gain against which capital losses
period may have been large relative to total assets. could be offset and was subject to the maximum long-
Also, when a merger occurred, the return of the acquir- term capital gain tax rate. If the aggregated result
ing corporation included the total end-of-year assets was a net loss, it was fully deductible against all
for the merged company but reflected only that portion income in computing taxable income.
of the receipts of the newly acquired company earned
since the date of merger. Companies that went out of The first statistics showing gains and losses from
existence as a result of a merger had zero assets but dispositions of property under section 1231 reported on
reported income and deduction items covering that corporation income tax returns are shown in tables 19
portion of their taxable year for which they operated and 20. Major industrial group classification was used
as a separate legal entity. for table 19 and size of total assets classification was
used for table 20. Net gains were reported on 52,811
returns and totaled $1,104,000,000. Net losses or equal
SALES OR EXCHANGES OF SECTION 1231 PROPERTY costs and receipts under section 1231 were reported on
21,469 returns. The net losses totaled $277,000,000.
"Capital assets" as defined by the Internal Revenue Gains and losses were computed by addingtheaccumu-
Code differed significantly from the generalandaccount- lated depreciation allowed (or allowable) with respect
ing concept of the term. In the Code definition, ". . . to the property to the receipts from its disposition and
the term 'capital assets' means property held by the subtracting the cost (or other basis) and the expenses of
taxpayer . . . but does not. include-(l) . . ., (2) prop- selling it. The cost or basis, depreciation, and expense
erty, used in his trade or business, of a character which of sales, as well as the net gains and losses are shown
is subject to the allowance for depreciation provided in in the tables. Net gains and losses include gains taken
section 167, or real property used in his trade or busi- into income during the year from payments received
ness, (3) . . ." Thus, property subject to depreciation on installment sales. Total costs, depreciation, and
and real property were separated from the broad expenses were reported in the year the installment sale