Friday, May 12, 2006

Tax Breaks - Roth IRA, 15% Capital Gains and Dividends, AMT

Category: Tax Law and Planning

From Wills, Trusts & Estates Prof Law Blog May 10, 2006:

Status of Tax Reconciliation Package
The United States Congress is in the final stages of its work on tax reconciliation legislation. Below are some of the highlights of the current version of the bill as reported in Jeanne Sahadi, Tax bill agreement reached,, May 9, 2006:

  • IRA Conversion. The bill would allow traditional IRAs to be converted to
    Roth IRAs even if the taxpayer's adjusted gross income is over $100,000.
    This provision may actually raise revenue because IRA holders would be required
    to pay tax now, that is, at the time of the conversion.
  • Long-term capital gains and dividends tax rate to remain at 15% for two more
    years (that is, through 2010).
  • Enhanced relief from the alternate minimum tax.
And from May 12, 2006:

Yesterday, May 11, 2006, the Senate approved the [tax cut] bill 54 to 44. On Wednesday, May 10, 2006, it passed the House. Accordingly, it is now being sent to President Bush who is expected to sign the legislation.

See Edmund L. Andrews, Senate Approves 2-Year Extension of Bush Tax Cuts, NY Times, May 12, 2006.

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