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We held that the absence of regulations did not preclude proper
adjustments in respect of the tax benefit rule and went on to
determine those adjustments in that case. The rationale of our
opinion was that section 58(h) was intended by Congress to
provide a basis for "how" the alternative minimum tax should be
applied in order to take into account the tax benefit rule.
We reaffirmed our position as to the effect of the absence
of regulations under section 58(h) in Breakell v. Commissioner,
97 T.C. 282, 285 (1991), affd. in part, revd. in part without
published opinion 996 F.2d 1231 (11th Cir. 1993); see also First
Chicago Corp. v. Commissioner, 88 T.C. 663, 669 (1987), affd. 842
F.2d 180 (7th Cir. 1988); cf. Estate of Hoover v. Commissioner,
102 T.C. 777, 782 (1994), revd. on another issue 69 F.3d 1044
(10th Cir. 1995), where we adopted a similar view in respect of
the absence of regulations directed to be prescribed by the
Secretary under section 2032A(g).
More recently, in H. Enters. Intl., Inc. v Commissioner,
supra, we dealt with a situation comparable to that herein,
involving the impact of the failure of the Secretary to issue
regulations to prevent tax avoidance under section 7701(f) on the
application of the limitations of sections 246A and 265(a)(2) to
the interest on funds borrowed by one corporation and used by an
affiliated corporation to purchase portfolio stock and tax-exempt
securities.
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