Roy E. and Linda Day - Page 10

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            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                              
                  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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