Adjusted gross income ratio. The portion of the tax which is attributable to amounts received in nonconvertible foreign currency shall, for purposes of applying § 301.6316-1 to the currency of each foreign country, be the amount by which:

The amount which bears the same ratio to the entire tax for the taxable year as (i) the taxpayer's adjusted gross income received in that currency bears to (ii) the adjusted gross income determined under section 62 by taking into account the entire gross income and all deductions allowable under that section without distinction as to amounts received in foreign currency, exceeds

The total of the allowable credits against tax, and payments on account of tax, which are properly allocable to the amount of that currency included in gross income.

Example. (1) For the calendar year 1955 Mr. Jones and his wife filed a joint return on which the adjusted gross income is as follows, after amounts received in foreign currency had been properly translated into United States dollars for tax computation purposes:

The following amounts are allowable as properly deductible from adjusted gross income, no determination being made as to whether or not any part of them is properly allocable to the Fulbright grant:

For the taxable year the following amounts are allowable as credits against the tax, or as payments on account of the tax:

The portion of the tax which is attributable to amounts received in nonconvertible foreign currency is $33.49, determined as follows: