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In Huntsberry v. Commissioner, supra, we held that tax
preferences are a significant, but not necessarily an
indispensable component of alternative minimum taxable income.
Accordingly, the taxpayers in that case were held liable for the
AMT computed in accordance with the specific provisions of
section 55, notwithstanding the fact that the taxpayers did not
have any items of tax preference for the taxable year in issue.
See Klaassen v. Commissioner, T.C. Memo. 1998-241, affd. without
published opinion 182 F.3d 932 (10th Cir. 1999). The same result
applies in the present case.
If Congress had intended to tax only items of tax
preference, it would have defined “alternative minimum taxable
income” differently, for example, solely by reference to items of
tax preference. Instead, Congress provided for a tax measured by
a broader base, namely, alternative minimum taxable income, in
which items of tax preference are included merely as potential
components.
We are cognizant of the inequity that petitioners perceive
in the application of the AMT under the circumstances of their
case. However, regarding whether it is “fair” that they should
be liable for the AMT, we are reminded of one of our recent
cases, Speltz v. Commissioner, 124 T.C. 165 (2005). In that
case, the taxpayers became liable for AMT in excess of $125,000
based on their exercise of incentive stock options. However, the
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