Tom and Louise Kappus - Page 12




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          give effect to each.”  Pekar v. Commissioner, 113 T.C. at 161.              
          However, if there is a conflict between a Code provision and a              
          tax treaty, the “last-in-time” rule will override the earlier               
          provision.  Id.; Whitney v. Robertson, supra at 194.                        
               Petitioners' position, that they are not subject to section            
          59(a)(2), is based upon two elements.  The first is their                   
          assertion that the U.S.-Canada treaty and section 59(a)(2) are in           
          conflict and the second is their assertion that the U.S.-Canada             
          treaty is later in time than section 59(a)(2) by reason of the              
          Third and Fourth Protocols, with the result that the provisions             
          of the treaty override section 59(a)(2).  Both of these elements            
          must be established in order for petitioners to prevail in this             
          case.  If the treaty and section 59(a)(2) are not in conflict,              
          then effect must be given to the provisions of both without                 
          regard to which of the two is later in time.  Pekar v.                      
          Commissioner, supra.  In that event, we must find that                      
          petitioners are subject to section 59(a)(2).  On the other hand,            
          if there is a conflict between the two, and if section 59(a)(2),            
          as opposed to the treaty, is found to be later in time, then                
          section 59(a)(2) controls as the last expression of the sovereign           
          will.  Jamieson v. Commissioner, T.C. Memo. 1995-550, affd.                 
          without published opinion 132 F.3d 1481 (D.C. Cir. 1997).                   
               As to the first element of their position, petitioners                 
          assert that the limitation on the foreign tax credit imposed by             






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