- 4 - adjustment. Because this adjustment would have increased alternative minimum taxable income and thereby increased AMT liability, respondent’s determination in this regard is in petitioners’ favor. Second, petitioners dispute the reduced amount of foreign tax credit which may be used in calculating the tentative minimum tax. They argue that they should not be required to pay Federal income tax when the amount of income taxes paid to Puerto Rico is greater than their regular (non-AMT) Federal tax liability. We have already found that respondent correctly calculated petitioners’ tax liability for the year in issue as required by the Internal Revenue Code. In particular, respondent correctly applied the AMT foreign tax credit limitation of section 59(a)(2)(A). See generally Pekar v. Commissioner, 113 T.C. 158, 164-165 (1999) (noting the constitutionality of the foreign tax credit limitation with respect to the AMT). Again, petitioners’ dispute is essentially political as it is directed at the manner, albeit an indirect manner, in which Congress has chosen to tax United States citizens who reside in Puerto Rico. Reviewed and adopted as the report of the Small Tax Case Division. To reflect the foregoing, Decision will be entered for respondent.Page: Previous 1 2 3 4 5
Last modified: May 25, 2011