William G. and Vivian Loomis - Page 6

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               In general, all Internal Revenue Code provisions that apply            
          in computing regular taxable income also apply in determining a             
          taxpayer's AMTI.  Sec. 1.55-1(a), Income Tax Regs.  However, at             
          the time of trial, taxpayers like petitioners who used the                  
          installment method in computing their taxable income could not              
          use the installment method in computing their AMTI.                         
          Specifically, section 56(a)(6) provided:                                    
                    SEC. 56(a).  Adjustments Applicable to All Tax-                   
               payers.--In determining the amount of the alternative                  
               minimum taxable income for any taxable year the                        
               following treatment shall apply (in lieu of the                        
               treatment applicable for purposes of computing the                     
               regular tax):                                                          
               *         *         *         *         *         *    *               
                         (6)  Installment sales of certain property.--                
                    In the case of any disposition after March 1,                     
                    1986, of any property described in section                        
                    1221(1), income from such disposition shall be                    
                    determined without regard to the installment                      
                    method under section 453. * * *                                   
          Section 1221(1) describes "property held by the taxpayer                    
          primarily for sale to customers in the ordinary course of his               
          trade or business".  The sale of farm products by a farmer is,              
          according to respondent, a disposition of section 1221(1)                   
          property.  See Rev. Rul. 80-19, 1980-1 C.B. 185.                            
               Respondent asserts, and petitioners do not dispute, that, in           
          this case, petitioners engaged in the business of farming, and              
          the sales of wheat pursuant to the contracts with Union Elevator            
          were dispositions in the ordinary course of their business.                 

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