Roy E. and Linda Day - Page 18

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            approximate the amount of tax that they would have owed had they                             
            been able to use the section 29 credits against RIT without                                  
            regard for the section 29(b)(5) limitation in the first place.                               
            Petitioners, in effect, argue that the ceiling on the section 29                             
            credit is raised for every dollar of credit they have.                                       
            Petitioners would transpose the express limitation of section                                
            29(b)(5) into a dead letter.  It seems unlikely that Congress                                
            intended to legislate a limitation so elastic as to be no                                    
            limitation at all.                                                                           
                  As a result of the section 29(b)(5) limitation, petitioners                            
            cannot claim that sufficient section 29 credits would have                                   
            reduced RIT as much as their items of tax preference and that                                
            therefore they received no benefit from the latter.  In fact,                                
            only a small amount of petitioners' credits was allowed in 1988,                             
            and none was permitted in 1989 and 1990 against RIT pursuant to                              
            section 29(b)(5).  See supra pp. 3-4.  Thus, petitioners' tax                                
            preference items reduced their RIT to an extent that their                                   
            section 29 credits could not match.  This sharply contrasts with                             
            the situation in First Chicago Corp., in which the taxpayer's use                            
            of foreign tax credits against RIT was not subject to an initial                             
            limitation.  First Chicago Corp. v. Commissioner, 88 T.C. at 665.                            
                  The instant case is also readily distinguishable from                                  
            Breakell v. Commissioner, 97 T.C. 282, 286-287 (1991), affd. in                              
            part, revd. in part and remanded without published opinion 996                               
            F.2d 1231 (11th Cir. 1993), in which this Court held that                                    

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