Estate of Clifford C. Haugen - Page 17

                                       - 16 -                                         

          The Court, accordingly, sustains respondent on the income-                  
          averaging issue.                                                            
               The second issue is the alternative minimum tax under                  
          section 55.  Section 55(a) imposes a tax equal to the excess of             
          (1) the tentative minimum tax for the taxable year, over (2) the            
          regular tax for the taxable year.                                           
               Petitioner argues that, if a taxpayer elects income                    
          averaging, that method of computation of the tax is exclusive and           
          trumps the alternative minimum tax under section 55.  The Court             
          does not agree with that argument.  In the conference committee             
          report to the Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.             
          933(a), 111 Stat. 881 (enacting section 1301), the conferees                
          stated:  "the provision [sec. 1301] does not apply for purposes             
          of the alternative minimum tax under section 55."  H. Conf. Rept.           
          105-220 at 508 (1997), 1997-4 C.B. (Vol. 2) 1457, 1978.  The                
          proposed and final regulations to section 1301 include this same            
          provision.  The preamble to the final regulations states "There             
          is no exception in the Code provisions relating to the                      
          alternative minimum tax that would permit the minimum tax to be             
          computed without regard to the effect of farm income averaging".            
          T.D. 8972, 2002-1 C.B. 443, 446.  This statement of the law is              
          consistent with the former version of section 1301 and a                    
          comparable provision imposing a minimum tax on tax preference               
          income under section 56 of the Tax Reform Act of 1969.  In Riley            





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  Next

Last modified: May 25, 2011