- 8 -
55(c)(1). If TMT is greater than the RIT, the TMT is the final
tax liability for the taxable year. Sec. 55(a). If, on the
other hand, RIT exceeds the TMT, nonrefundable credits (including
the section 29(a) nonconventional fuel source credit) are applied
in a set order to reduce the RIT, but not below the TMT for the
taxable year. See, e.g., sec. 29(b)(5).
Finally, the section 53 minimum tax credit is applied
against the RIT, but again only to the extent that the RIT
exceeds the TMT. Sec. 53(c). Pursuant to section
53(d)(1)(B)(iii), the amount available for the minimum tax credit
is increased by any section 29 credits not allowed solely by
reason of the limitation of section 29(b)(5). The section 53
minimum tax credit can be carried forward indefinitely to
subsequent taxable years and utilized to reduce regular tax to
the extent it exceeds TMT in those years. Sec. 53(a), (c).
B. The Tax Benefit Rule
Presumably since Congress recognized that it could not
envision all of the possible inequities of the minimum tax, it
incorporated section 58(h), which provided a so-called Tax
Benefit Rule, as part of the add-on minimum tax system in 1976.
Tax Reform Act of 1976, Pub. L. 94-455, 90 Stat. 1553. The
section 58(h) tax benefit rule mandated that the Secretary of the
Treasury
prescribe regulations under which items of tax
preference shall be properly adjusted where the tax
treatment giving rise to such items will not result in
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011