Roy E. and Linda Day - Page 1

                                           108 T.C. No. 2                                                

                                      UNITED STATES TAX COURT                                            

                              ROY E. AND LINDA DAY, Petitioners v.                                       
                         COMMISSIONER OF INTERNAL REVENUE, Respondent                                    

                  Docket No. 20732-94.                  Filed January 9, 1997.                           

                        R determined deficiencies in Ps' Federal income                                  
                  tax for the years 1988 through 1990.  Ps seek to                                       
                  augment the amount of sec. 29, I.R.C., nonconventional                                 
                  fuel source credits they may take against regular                                      
                  income tax by increasing the availability of such                                      
                  credits under the sec. 29(b)(5), I.R.C., limitation.                                   
                  Ps argue that if their taxable income in each year had                                 
                  not been reduced by tax preference items, the resulting                                
                  tax payable on that income would nonetheless have been                                 
                  the same due to sec. 29, I.R.C., credits generated in                                  
                  these years.  R contends that relief under the sec.                                    
                  59(g), I.R.C., tax benefit rule is not warranted.  The                                 
                  preferences, by reducing Ps' taxable income, allowed an                                
                  increased amount of sec. 29, I.R.C., credits to go                                     
                  unused in the years generated and thereby increased the                                
                  sec. 29, I.R.C., credits available to be carried over                                  
                  indefinitely pursuant to sec. 53, I.R.C.  Held:  Ps are                                
                  not entitled to use the sec. 59(g), I.R.C., tax benefit                                
                  rule to reduce their tentative minimum tax in order to                                 

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