We see no need to delve into the history of section 58(h) and the thrust which has been accorded it in the decided cases. That task has been thoroughly performed in First Chicago Corp. v. Commissioner, 88 T.C. 663">88 T.C. 663 (1987), affd. 842 F.2d 180">842 F.2d 180 (7th Cir. 1988), which established two principles which govern our decision herein. First, we reaffirmed the position, which we had previously taken in Occidental Petroleum Corp. v. Commissioner, 82 T.C. 819">82 T.C. 819 (1984), that the1991 U.S. Tax Ct. LEXIS 77">*82 fact that the Secretary of the Treasury had not issued regulations (a situation which continues to exist) ³ did not relieve us from doing "the best we can with section 58(h)." Respondent does not dispute this principle herein. First Chicago Corp. v. Commissioner, 88 T.C. 663">88 T.C. 669. Second, we reaffirmed the position we took in 82 T.C. 819">Occidental Petroleum Corp. v. Commissioner, supra, that section 58(h) was to be implemented by first determining the reduction in regular taxes for the taxable year through the use of nonpreference items and then applying the preference items to determine the extent to which the use of such latter items resulted in a tax benefit and therefore should be subject to the alternative minimum tax. See also Weiser v. United States, 746 F. Supp. 958">746 F. Supp. 958 (N.D. Cal. 1990), on appeal (9th Cir., Sept. 26, 1990); Rev. Rul. 80-226, 1980-2 C.B. 26, for a statement of respondent's position. The fact that First Chicago and 97 T.C. 282">*286 Occidental Petroleum involved credits instead of deductions is, in our opinion, immaterial.

1991 U.S. Tax Ct. LEXIS 77">*83 The application of the foregoing principles in respect of the order in which deductions are utilized in computing the alternative minimum tax herein can be illustrated as follows:

On the basis of the foregoing, it is apparent that petitioners were unable to utilize $ 163,534 out of their preference item deductions in computing their 1986 taxable income for purposes of their regular income tax. But that consequence does not end the matter. While the $ 163,422 did not result in any tax benefit in determining petitioners' regular income tax, it nevertheless contributed $ 158,895 to produce the negative adjusted income which constitutes the starting point for computing the alternative minimum tax. Thus, to that extent, petitioners have already received the equivalent of a reduction in the $ 427,6461991 U.S. Tax Ct. LEXIS 77">*84 preference items. Petitioners' position fails to take into account that the base of the alternative minimum income tax in section 55 was changed from gross income to adjusted gross income by section 201(a) of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 411, establishing the use of negative adjusted gross income as the base figure, which had built into it offsets representing preference item deductions, e.g., the $ 100 dividend exclusion and the section 1202 deduction involved herein. To accept petitioners' position would clearly produce an unwarranted double deduction to the extent of $ 158,895. We find support for our analysis and conclusion in 746 F. Supp. 958">Weiser v. United States, supra.With respect to the remaining $ 4,527 of the $ 163,422 97 T.C. 282">*287 loss of tax benefit in respect of petitioners' regular income tax, it is apparent that, unless the $ 427,646 in preference items is reduced by that amount, petitioners will be subject to the alternative minimum tax on an amount that in no way produced a tax benefit. Thus, we hold that the $ 427,646 of preference items should be reduced by $ 4,527 in calculating petitioners' alternative1991 U.S. Tax Ct. LEXIS 77">*85 minimum tax.

In view of the concessions of the parties on other issues,

Decision will be entered under Rule 155.