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Respondent determined a deficiency in petitioner’s Federal
income tax of $6,969 for the taxable year 2002. The issues for
decision are whether petitioners are subject to the alternative
minimum tax provided by section 55 and interest on the liability
at issue.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioners resided in Columbia, Missouri.
Petitioners reported adjusted gross income of $405,807,
including a long-term capital gain of $342,263, on their 2002
Federal Income Tax return. They computed tax on the capital gain
at the maximum capital gains tax rate for 2002, 20 percent. They
did not, however, compute or report alternative minimum tax.
Respondent sent petitioners a notice of deficiency in which
respondent determined that petitioners were subject to
alternative minimum tax on the long-term capital gain resulting
in a deficiency in the amount of $6,969.
After receiving the notice of deficiency, petitioners
contacted the Internal Revenue Service’s (IRS) local office,
where they reviewed the figures on their 2002 return with an
agent. It was during this phone call that petitioners believed
that there was a discrepancy between the figures in the IRS’s
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