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All section references, unless otherwise specified, are to
sections of the Internal Revenue Code in effect for the years at
issue. Statutory provisions applicable to the years in issue are
reproduced in the Appendix.
All of the facts have been stipulated. The Court finds
these facts. This reference incorporates the stipulation of
facts and attached exhibits. Petitioners were married and
resided in Morgantown, West Virginia, when they filed their
petition.
Respondent determined deficiencies in petitioners' Federal
income tax for 1988, 1989, and 1990, in the amounts of $6,791,
$14,825, and $10,127, respectively.
Petitioners invested in oil- and gas-producing properties,
the production from which qualified for section 29
nonconventional fuel source credits of $12,706 in 1988, $14,210
in 1989, and $14,729 in 1990. Petitioners had depletion,
intangible drilling costs, accelerated depreciation, and
adjustments in 1988, 1989, and 1990 totaling $37,910, $76,329,
and $70,502, respectively. These amounts were added to
petitioners' taxable income to calculate their AMTI.
Petitioners' 1988 taxable income as determined by respondent
was $115,374, and their RIT as so determined was $30,611.
Respondent also determined self-employment tax to be $5,859 for
the taxable year 1988. The Days had no AMT liability for 1988.
For 1989, petitioners' taxable income as determined by respondent
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