Lawrence Moore - Page 5

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          provided in sections 56 and 58 are taken into account for AMTI,             
          and the tax preference items set forth in section 57 are not                
          permitted to reduce AMTI.  Sec. 55(b)(2).  To determine the                 
          taxable amount of AMTI, the AMTI is reduced by an exemption                 
          amount, which in this case is $33,750, subject to a gradual                 
          phase-out of the exemption amount as AMTI exceeds $112,500.  Sec.           
          55(d)(1), (3).  The AMT rate is then applied to AMTI, as reduced            
          by the exemption amount.  Sec. 55(b).  For the taxable year at              
          issue in this case, the applicable AMT rate is 26 percent.  The             
          figure resulting from the application of the AMT rate to the AMTI           
          is the tentative minimum tax (TMT).                                         
               Next, the regular income tax is compared to TMT.  If TMT is            
          greater than the regular income tax, the TMT is the final tax               
          liability for the taxable year.  Sec. 55(a).                                
               In petitioner's case,2 the regular income tax is $1,219, the           
          amount petitioner reported on lines 40 and 49 of his Form 1040.             
          Pursuant to section 55(a), the AMT is the difference between the            
          tentative minimum tax and the regular tax.  The TMT is 26 percent           
          of the excess of petitioner's AMTI over his exemption amount of             
          $33,750.  See sec. 55(b)(1)(A)(i)(I).  As petitioner had no items           
          of tax preference in 1997, AMTI here means petitioner's taxable             
          income determined with the adjustments provided in section 56.              

               2There are no factual issues in dispute that are relevant to           
          ascertaining the tax liability of petitioner in this case and the           
          Court therefore finds sec. 7491(a) to be inapplicable.                      

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