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Respondent determined a deficiency in petitioners’ Federal
income tax of $2,483 for the taxable year 1998.
The issue for decision is whether and to what extent
petitioners are liable for the alternative minimum tax (AMT).
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Mayaguez, Puerto Rico, on the date the petition was filed in this
case.
There are no disputed facts in this case. During 1998,
petitioners’ primary sources of income were petitioner husband’s
Federal government salary of $56,746 and a distribution from his
Federal retirement account of $97,796. Petitioners filed a joint
Federal income tax return for taxable year 1998. On that return
they reported a foreign tax credit of $34,616 and zero tax
liability. They also reported zero liability for the AMT. In
the statutory notice of deficiency, respondent determined that
petitioners are liable for the AMT in the amount of $2,483. This
is in accord with our calculation under section 55(a), which is
as follows:
Taxable income reported by petitioners1 $129,603
Exemption deductions claimed by petitioners 10,800
Itemized deduction claimed by petitioners for taxes paid 999
Amount of section 68(a) limitation on itemized deductions (897)
Alternative minimum taxable income 140,505
Exemption amount (45,000)
Taxable excess 95,505
Pre-credit tentative minimum tax (26% of taxable excess) 24,831
AMT foreign tax credit (limited to 90% of $24,831) (22,348)
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Last modified: May 25, 2011