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In general, all Internal Revenue Code provisions that apply
in computing regular taxable income also apply in determining a
taxpayer's AMTI. Sec. 1.55-1(a), Income Tax Regs. However, at
the time of trial, taxpayers like petitioners who used the
installment method in computing their taxable income could not
use the installment method in computing their AMTI.
Specifically, section 56(a)(6) provided:
SEC. 56(a). Adjustments Applicable to All Tax-
payers.--In determining the amount of the alternative
minimum taxable income for any taxable year the
following treatment shall apply (in lieu of the
treatment applicable for purposes of computing the
regular tax):
* * * * * * *
(6) Installment sales of certain property.--
In the case of any disposition after March 1,
1986, of any property described in section
1221(1), income from such disposition shall be
determined without regard to the installment
method under section 453. * * *
Section 1221(1) describes "property held by the taxpayer
primarily for sale to customers in the ordinary course of his
trade or business". The sale of farm products by a farmer is,
according to respondent, a disposition of section 1221(1)
property. See Rev. Rul. 80-19, 1980-1 C.B. 185.
Respondent asserts, and petitioners do not dispute, that, in
this case, petitioners engaged in the business of farming, and
the sales of wheat pursuant to the contracts with Union Elevator
were dispositions in the ordinary course of their business.
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