William G. and Vivian Loomis - Page 4

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          proceeds from contract 5554A to secure a loan from Commodity                
          Credit Corporation (CCC).                                                   
               On January 2, 1992, Union Elevator paid petitioners                    
          $157,264.26, the amount due under the contracts.  It was not                
          unusual for petitioners to collect payment on the contracts soon            
          after the first of the year.  The balance of the loan from CCC on           
          this date was $32,725.37, consisting of principal and interest.             
          This amount was not paid to petitioners but was withheld and                
          remitted to CCC.  Petitioners, in preparing their 1991 Federal              
          income tax return, did not include in income any amount relating            
          to the contracts for regular tax or alternative minimum tax (AMT)           
               By statutory notice of deficiency, respondent determined               
          that petitioners' AMTI for 1991 should be increased to take into            
          account the deferred sales proceeds from the contracts.  Respon-            
          dent increased petitioners' AMTI by $156,121 to account for these           
               Section 612 provides that gross income means all income from           
          whatever source derived.  Sec. 61(a)(3).  Absent a statutory                
          exception, section 1001(c) requires a taxpayer to recognize, in             

               2All section references are to the Internal Revenue Code in            
          effect for the taxable year in issue, and all Rule references are           
          to the Tax Court Rules of Practice and Procedure, unless                    
          otherwise indicated.                                                        

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