Lawrence Moore - Page 6

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               Petitioner reads the flush language following section                  
          55(b)(2)(B) to mean that no adjustments provided by section 56              
          may be made to his taxable income to determine AMTI.  The flush             
          language states that if a taxpayer is subject to the regular tax,           
          he is subject to the AMT, and if the regular tax is determined by           
          reference to an amount other than taxable income, such amount               
          shall be treated as taxable income for AMT purposes.  Petitioner            
          argues that the flush language means that the AMT tax rate can              
          only be applied to his regular taxable income.  Petitioner                  
          misunderstands the operation of the AMT.  It is a tax not on                
          taxable income but on "alternative minimum taxable income" in               
          excess of the exemption amount.  Sec.  55(b)(1); Ellison v.                 
          Commissioner, T.C. Memo. 1995-427 (AMTI of individuals includes             
          taxable income plus State and local taxes, personal exemptions,             
          and miscellaneous itemized deductions).  And to determine AMTI              
          the statute requires the taxpayer to make adjustments to taxable            
          income to compute alternative minimum taxable income.  Sec.                 
          55(b)(2)(A) and (B); Holly v. Commissioner, T.C. Memo. 1998-55              
          (AMTI included taxable income plus personal exemption,                      
          miscellaneous deductions, and State taxes); Ellison v.                      
          Commissioner, supra.                                                        
               Petitioner's taxable income for 1999 was $8,134.05, the                
          amount reported on line 39 of Form 1040.  As relevant herein, the           
          adjustments required by section 55(b)(2) as provided in section             

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