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to the United States in respect of profits, income or
gains which arise (within the meaning of paragraph 3)
in the United States, except that such deduction need
not exceed the amount of the tax that would be paid to
the United States if the resident were not a United
States citizen; and
(b) For the purposes of computing the United
States tax, the United States shall allow as a credit
against United States tax the income tax paid or
accrued to Canada after the deduction referred to in
subparagraph (a). The credit so allowed shall not
reduce that portion of the United States tax that is
deductible from Canadian tax in accordance with
subparagraph (a).
In 1986, Congress revamped the alternative minimum tax
imposed on noncorporate taxpayers. Tax Reform Act of 1986, Pub.
L. 99-514, sec. 701(a), 100 Stat. 2320 (herein referred to as Tax
Reform Act of 1986). As amended at that time, former section
55(a) imposed an alternative minimum tax on noncorporate
taxpayers equal to the excess of the “tentative minimum tax” over
the “regular tax”.7 Former section 55(b) defined "tentative
minimum tax" as an amount equal to 21 percent of so much of the
"alternative minimum taxable income" for the taxable year as
exceeded the "exemption amount", reduced by the "alternative
minimum tax foreign tax credit" for the year. Former section
59(a)(1) defined "alternative minimum tax foreign tax credit" as
the foreign tax credit allowed by section 27 with certain
7 The term “regular tax” means “the regular tax liability
for the taxable year (as defined in sec. 26(b)) reduced by the
foreign tax credit allowable under section 27(a)”. Sec.
55(c)(1).
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Last modified: May 25, 2011