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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.
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Last modified: May 25, 2011