- 5 -
the year of sale, gain realized from the sale or exchange of
property. Section 453, however, provides an exception to this
rule. Estate of Silverman v. Commissioner, 98 T.C. 54, 62
(1992).
Specifically, section 453 permits a taxpayer to report
income from an "installment sale" under the "installment method."
Sec. 453(a). Under the "installment method", a proportionate
amount of income is recognized in the year when a payment is
received. Sec 453(c). Respondent concedes that, under the
installment method, petitioners properly reported income from the
contracts in 1992, the year they received payment.
The dispute between petitioners and respondent, however,
centers on the proper application of the AMT. Section 55(a)
imposes an alternative minimum tax in an amount equal to the
excess of the "tentative minimum tax" over the "regular tax".
The “tentative minimum tax” is computed based on a taxpayer's
“alternative minimum taxable income”.
To determine AMTI, taxable income is adjusted as provided by
sections 56 and 58. After adjusting taxable income, as provided
in sections 56 and 58, the redetermined amount is increased by
the “items of tax preference”, as set out in section 57. The
resulting amount constitutes a taxpayer's AMTI. The AMTI in
excess of an exemption amount is multiplied by 24 percent to
determine the tentative minimum tax.
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011