The application of the § 382 limitation to credits requires determining the income tax reduction benefit when applying the § 382 limitation to deductions.

Question

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The § 382 limitation applies to both deductions and credits. The income tax reduction benefit of a deduction is the amount of tax that is saved by taking the deduction. The income tax reduction benefit of a credit is the amount of tax that is directly reduced by the credit.

The Application of the § 382 Limitation to Credits Requires