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The sole issue for decision is whether petitioners are
subject to the limitations on the alternative minimum tax foreign
tax credit under section 59(a)(2).1 Petitioners contend that the
Convention Between the United States of America and Canada With
Respect to Taxes on Income and on Capital (hereinafter U.S.-
Canada treaty), Sept. 26, 1980, U.S.-Can., T.I.A.S. No. 11087 (as
in effect during 1997), overrides the application of section
59(a)(2).
This case was submitted fully stipulated pursuant to Rule
122. The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioners resided in Orangeville, Ontario, Canada.
Petitioners are husband and wife.
Petitioners are, and were during 1997, U.S. citizens.
Petitioners resided and worked in Canada throughout 1997.2
Petitioner Thomas Kappus (Mr. Kappus) has resided and worked
in Canada since 1973. During 1997, Mr. Kappus was employed as
1 The parties agree that if the Court holds for
petitioners, then there is a deficiency in income tax of $2,166,
and if the Court holds for respondent, then there is a deficiency
in income tax of $6,152.
2 The parties agree, for purposes of this case, that
petitioners were residents of Canada throughout 1997 for purposes
of the Convention Between the United States of America and Canada
With Respect to Taxes on Income and on Capital (hereinafter U.S.-
Canada treaty), Sept. 26, 1980, U.S.-Can., T.I.A.S. No. 11087 (as
in effect during 1997).
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