"whatever" <nomail[at]hotmail.com> wrote:

- quote -

Just read the instructions as I suggested they should be
intrepreted and decide whether the IRS could prove in court
that that is not what they say. Your choice, if you
disagree, is that you, not I, will unnecessarily lose the
credits.

ed

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I'm not convinced, but we'll just have to agree to disagree.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"whatever" <nomail[at]hotmail.com> wrote:

- quote -

I disagree. You are losing them Solely because of the
application of, and I quote, "29(b)(6) Application with
other credits. The credit allowed by subsection (a)
**for any taxable year** shall not exceed the excess
**(if any)** of -
(A) the regular tax for the taxable year reduced by the sum
of the credits allowable under subpart A and sections 27
and 28, over
(B) the tentative minimum tax for the taxable year

You are intrepreting this limitation as to be the total
amount of credits ever useable, but 29(b)(6)(A&B) clearly
limits the amount of credits usable in any single year,and
the 8801 Instructions do not go further than just referring
to this limitation.

ed

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

The instructions on line 20 say "Enter the total of any [29
credits] not allowed for 2002 *SOLELY* because of the
limitations under Sec. 29(b)(6)(B)." (emphasis added) This
is probably a reference to 53(d)(1)(B)(iii)--"special rule.
The adjusted net minimum tax for the taxable year shall be
increased by the amount of the credit not allowed under [29]
solely by reason of the application of 19(b)(5)(B)."
29(b)(6)(B) limits the amount of the credit to an amount
that brings you down to the TMT. If you have more 29
credits than you have TMT, then you aren't really losing
them "soley" b/c of the TMT limitation, you're losing them
b/c they aren't refundable credits. So if your TMT is $10,
the instructions say to carry over up to $10 of disallowed
29 credits on 8801 (we agree on this), but if you have $18
of 29 credits in that year, $8 of them appear lost. Agree?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"whatever" <nomail[at]hotmail.com> wrote:

- quote -

whatever: Yes, you do have to have taxable income in a
specific year in order to take any (except "refundable"
)credits that year, however, any unused credit carries over
on form 8801 per line 20 instructions until a year when
there is enough tax in excess of TMT to absorb them. There
is no pohibition to TMT being zero. Sec 29(b)(6)(B)
confirms the carryover is applicable for any amount in
excess of the difference in Regualr Tax over TMT (if any).
If both are zero, or TMT is greater than ( of equal to )RT,
then it all carries over. By the way, all OTHER credits
are used prior to Sec 29 or Sec 30 credits.

ed

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I'm not actually sure that last reply is accurate. If
you're losing the credits b/c of AMT, that's one thing, but
if you just don't have any taxes I think they're
use-or-lose.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"jbscpa" <johnNOSPAMEVER[at]NOSPAMstambaughpc.com> wrote:

- quote -

The REASON all the credit was not allowed is because these
credits cannot offset AMT and you have lowered your regular
tax (with sec 29 and/or other credits) to the TMT. NEXT
YEAR you enter the unused credit on line 20 of form 8801 to
recoup any AMT credit and the rest of the sec 29 credit,
unless limited by the TMT again. So, the sec 29 credit IS
carried over, but you must use form 8801 to get it. Note
that any unused Qualified Electric Vehicle Credit is handled
the same way.

ed

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

The real question I have has to do with carryover of unused
credits.

There is no provision in the Law for carryover of unused Sec
29 credits. It is simply silent.

The law simply does not provide any discussion of carryover
of unused credits.

So, the question is what happens to the 2002 unused credits
my client has?

The client had a tax liability much less than the credits
available, thus there are unused credits.

The general consensus among practitioners is that unused
credits can be carried forward.

Most practitioners have been carrying them over in tax
returns.

But by concern is that this "consensus' is not based on the
Law, the Regulations or the Court Cases.

Does anyone have anything authoritative in this issue?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->