- 10 -
years before the Court.) Moreover, whereas section 58(h) was
concerned with the effect of preferences on a taxpayer's income
tax liability, section 59(g) focuses on the narrower effect of
preferences and adjustments on a taxpayer's regular tax
liability. The legislative history surrounding retention of the
tax benefit rule indicates that Congress indeed intended to
constrain its application, to wit:
It is clarified that the application of the tax
benefit rule to the minimum tax is within the
discretion of the Secretary of the Treasury. Since the
regular and minimum taxes generally are computed
separately, relief from the minimum tax under the tax
benefit rule is not appropriate solely by reason of the
fact that a taxpayer has received no benefit under the
regular tax with respect to a particular item. * * *
[H. Conf. Rept. 99-841, 1986-3 C.B. (Vol. 4) 262-263;
emphasis added.]
As further evidence of the limited scope of section 59(g), the
legislative history states, without mentioning the tax benefit
rule, that "Credits that cannot be used by the taxpayer due to
the effect of the alternative minimum tax can be carried over to
other taxable years under the rules generally applying to credit
carryovers." S. Rept. 99-313, supra, 1986-3 C.B. at 522.
We now apply the foregoing principles to the facts before
us.
For the taxable years 1988 through 1990, petitioners were
entitled to certain section 29(a) nonconventional fuel source
credits. However, due to the section 29(b)(5) limitation, only a
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