- 2 -
The sole issue for decision is whether petitioners are
liable for the alternative minimum tax (AMT) under section 55.2
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioners' legal residence at the time the petition
was filed was Wheat Ridge, Colorado.
Petitioners filed a joint Federal income tax return for 1995
on which they reported taxable income of $27,267, based on the
following gross income items:
Wages and salaries $81,644
Taxable interest income 520
Dividend income 27
Schedule E real estate loss (11,422)
Unemployment compensation 4,025
Nonemployee compensation 5,156
Total income $79,950
Petitioners' return included a Schedule A, Itemized Deductions,
in which they claimed itemized deductions for the following:
2 The deficiency includes self-employment tax under sec.
1401(a) on self-employment income of $5,156 that petitioners
reported as nonemployee compensation on their 1995 return but for
which they paid no self-employment tax. Petitioners conceded
this issue at trial. Another adjustment in the notice of
deficiency disallowed petitioners' child care credit under sec.
24 in the amount of $901 because of respondent's determination
that petitioners were liable for the alternative minimum tax
(AMT). See sec. 24(d)(2). This adjustment will be resolved by
the Court's holding on the AMT issue.
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